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first annual report charts progress in setting up the new single Financial Ombudsman Service

2 August 2000

The Financial Ombudsman Service - the complaints-handling scheme being set up by law to provide a single port of call for resolving personal finance disputes - today published its first annual report. The report covers a year spent bringing together eight existing complaints-handling and ombudsman schemes in preparation to launch the single, unified ombudsman service next year.

Andreas Whittam Smith, Chairman of the Financial Ombudsman Service, explained:

The new ombudsman service will start handling complaints in its own right when it receives its statutory powers next year. Until then, we are providing a common management and support service for the existing ombudsman schemes which come under our "umbrella". Our aim is to be ready with a single integrated service when the legislation is brought into force.

The new infrastructure for the combined ombudsman service includes sharing offices, facilities, management and staff. The separate complaints-handling schemes - which together cover personal finance disputes ranging from motor insurance to pension plans, mortgages to stocks and shares - have already come together under one roof during the year as part of the formation of the Financial Ombudsman Service.

Describing the challenges ahead, Walter Merricks, the Chief Ombudsman, commented:

Putting together the staff and systems of different organisations, while maintaining the service to consumers and the financial services industry, has proved a challenging task. But now this has been achieved, we can focus on developing the service objectives set out in this annual report. Parliament has approved the framework under which we are to work, and there will be high expectations for us to meet, when we assume our new powers next year. But our aim is clear and is shared by consumers, the industry and our staff alike - to build on the strengths of the existing schemes, while taking forward the ombudsman concept into the new century.

The first annual report of the Financial Ombudsman Service includes:

  • Details about the financial and operational logistics involved in merging separate organisations and setting up a new statutory body.
  • An overview of the work carried out by the existing ombudsman schemes while the new unified ombudsman structure has been put into place.
  • Longer term objectives for the Financial Ombudsman Service, and the practical realities involved in meeting these aims.

notes for editors

  1. The Financial Ombudsman Service is being created as part of the new Financial Services and Markets Act which is expected to come into force next year. The new ombudsman scheme will bring together eight existing complaints-handling schemes to provide, as far as possible, a unified service to resolve disputes between consumers and financial services firms. The eight organisations involved are:
    • The Banking Ombudsman (for complaints about retail banks, including former building societies which are now banks)
    • The Building Societies Ombudsman (for complaints about building societies)
    • The Insurance Ombudsman (for complaints about general insurance - life insurance complaints are dealt with by the PIA Ombudsman)
    • The Investment Ombudsman (for complaints about firms which manage investment funds and which are regulated by the Investment Management Regulatory Organisation - IMRO)
    • The Personal Insurance Arbitration Service (for complaints about general insurance involving companies that are not members of the Insurance Ombudsman)
    • The Personal Investment Authority (PIA) Ombudsman (for complaints about financial advisers, life insurance companies, friendly societies etc regulated by the PIA)
    • The Securities and Futures Authority (SFA) Complaints Bureau (for complaints about stockbrokers and futures traders etc regulated by the SFA)
    • The FSA Direct Regulation Complaints Unit (for firms directly regulated by the Financial Services Authority)
  2. Until the Financial Ombudsman Service officially gains its complaints-handling responsibilities under the new legislation next year, the current eight complaints-handling and ombudsman schemes will continue to deal with complaints under their own rules and terms of reference. However, the Financial Ombudsman Service already provides central management support, staffing and administration for the separate schemes.
  3. Copies of the first annual report of the Financial Ombudsman Service, covering the period from 26 February 1999 to 31 March 2000, are available free of charge from the Financial Ombudsman Service (phone 020 7964 0092).

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