Hunt Review suggests awards scheme to recognise good complaints handling
The future impartiality of the Financial Ombudsman Service (FOS) has been called into question following the publication of the Hunt Review last month.
The industry has reacted vociferously against the idea that an awards scheme should be launched to identify and reward businesses that handle complaints well and a wooden spoon scheme for the worst performers.
Jonathan Davies, partner at Reynolds Porter Chamberlain, said singling out firms that have lost the highest proportion of FOS cases to receive official wooden spoon awards would put unfair pressure on companies not to oppose complaints. "Singling out individual firms for a wooden spoon would be unfair as the complaints record of that firm may differ from that of the next firm by a fraction of a percent," he added.
Davies said complaints against firms "all too frequently' arise from sales of financial products that took place many years beforehand. "The sales environment of that firm may have changed radically since then and it may even have exited completely the product line that has received the complaints."
Advisers have also expressed dismay at the report. Alan Lakey, principal of Highclere Financial Services, said it seemed as if the report was saying the rights of consumers to complain took precedence over the rights of firms.
He said in addition, there were a number of other issues that may have escaped criticism. The report suggested a two-tier fee structure where there is a fee for an assessment and one for an investigation. "We do not know what this means exactly but it is likely to be to the disadvantage of firms as it is a mechanism by which the FOS can raise its fees," Lakey said.
Roger Edwards, product director at Bright Grey, said a good complaints process was vital to provide customers with a positive experience as the way the industry handles complaints determines whether it keeps existing customers and affects whether it can attract new customers.
"The reality is the industry should not need awards schemes to determine the quality of its complaints handling - but if the Hunt review proposal created an improvement across the board which enhanced the industry's reputation then I am all for it. I wish the industry could do it without such an obvious kick up the backside though," Edwards added.
