Sept 19 – Fearful of FOS

The Financial Ombudsman Service is obliged to publish decisions which have been referred to an Ombudsman.  Firms should be looking at its website and searching for mortgage based decisions to update themselves on issues which might arise from the approach being taken.

We have looked at four recent decisions with three of those decided in favour of the firms and one being lost.  The reference numbers of these decisions are DRN5877521; DRN2702525; DRN9136557; and DRN1551446.  In looking at the narrative, whilst not relying fully on the rules that may have prevailed at the time, there is clear evidence that a full consideration of what was reasonable has been taken.

In the cases supported by FOS, the importance of good record keeping is highlighted, however in one case where this did not exist, what was likely on the balance of the oral evidence prevailed in favour of the broker.  In that these decisions cover interest only, debt consolidation and fund raising for investment purposes, all areas under scrutiny from claims management firms, these decisions are welcome.  The case lost covered tax advice which ended up being incorrect and emphasises the need for advisers to only operate within their sphere of genuine expertise.  Also if passing on other parties views, to ensure that they are clearly sighted as such.

Many advisers are nervous of FOS, but these cases show that a well constructed and argued defence can gain their support.