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annual review 2010/2011

1 April 2010 to 31 March 2011

other work we have done

To support our work in settling disputes between consumers and businesses providing financial services, we feed back the lessons learned from our work to a wide range of stakeholders and customers.

This section highlights some of these stakeholder-engagement activities. There is more information about this work in our corporate plan, published in January each year.

working with the FSA and OFT

We have regular contact both with the Financial Services Authority (FSA), as the regulator of financial services, and the Office of Fair Trading (OFT), as the regulator of consumer credit, on matters which are relevant to our role and responsibilities.

In particular, during the year we worked with FSA on the consultation paper, CP10/21 - consumer complaints (award limit and changes to complaint handling rules), which included proposals to raise the maximum amount of compensation that the ombudsman can tell a business to pay from £100,000 to £150,000.

The consultation paper also proposed some rule changes - to improve businesses' complaints-handling processes - and it asked for evidence on whether our eligibility rules for complainants should be extended to cover victims of identity theft.

Following on from feedback to the discussion paper, DP10/1 - consumer complaints (emerging risks and mass claims), which we produced jointly with the FSA and the OFT, we have worked with those two regulators to replace the process for dealing with issues which may have wider implications for consumers or businesses with arrangements which include a joint FSA, OFT and ombudsman co-ordination committee.

extensions to our remit

We worked closely with HM Treasury and the FSA during the year, to enact the new "rules instrument" required for implementing the second Electronic Money Directive on 30 April 2011.

We will continue to work with HM Treasury, the FSA and the OFT on five further changes or extensions to our remit:

  • HM Treasury and the Department for Trade, Enterprise and Investment in Northern Ireland are considering bringing the regulation of credit unions in Northern Ireland under the FSA. This will in turn bring these credit unions within our jurisdiction.

  • The European Directive that updates the arrangements for "UCITS" (Undertakings for Collective Investment in Transferable Securities) will, for the first time, create the possibility of a fund authorised in one EU member state being managed by a fund manager authorised in another member state. The implications of this for the scope of our jurisdiction are currently under review.

  • The transfer of the regulation of second-charge mortgages from the OFT to the FSA.

  • HM Treasury are looking to extend the FSA's regulatory powers to cover the exercise of rights in relation to the onward sale of mortgage books - rather than just the administration of them. In turn, this would bring complaints about these wider activities within our jurisdiction.

  • HM Treasury are also looking to extend the scope of the FSA's regulatory powers to a wider range of "sale and rent-back" providers, who would then come under our jurisdiction for the first time.

regulatory review

The government made the reform of financial regulation one of its key priorities, and it has set out proposals for a new regulatory framework. Building on its consultation document of July 2010, it published A new approach to financial regulation: building a stronger system in February 2011. This confirmed the government's intention that the ombudsman service would remain independent, with a role clearly distinct from the regulator.

We will continue to work closely with HM Treasury and the FSA on issues arising from regulatory reform which might affect our work.

national and international role

We continue to maintain close relations with a number of government departments that have a particular interest in what we do - including HM Treasury, the Department for Business, Innovation and Skills (BIS) and the Ministry of Justice.

At an international level, we have continued to work with the European Commission on improving the availability of cross-border "alternative dispute resolution" (ADR), primarily through FIN-NET, the network of European financial-dispute resolution services. We have also worked with the Commission as it prepares a proposal for new legislation on "alternative dispute resolution".

freedom of information

The Ministry of Justice confirmed in January 2011 that the Freedom of Information Act will be extended to cover the ombudsman service with effect from October 2011. While not currently subject to this Act, we aim to answer questions about our work as though we were - in addition to publishing extensive information on our website about what we do and how we do it.

In its February 2011 consultation paper on a new approach to financial regulation, the government said it wanted to clarify that the ombudsman service could publish its decisions in a proactive and co-ordinated way. We will be working with our stakeholders to consider how this may be put into practice.

external review

Three years on from the publication of the report from our last external review - carried out by Lord Hunt of Wirral into the accessibility and transparency of our service - the ombudsman service has asked the National Audit Office (NAO) to look at our efficiency.

The first stage of the NAO's work started at the beginning of April 2011. This involved a scoping study, as a result of which the NAO will recommend to our non-executive board the particular areas on which the review should focus.

engaging with stakeholders

We carry out a wide range of activities aimed at sharing our experience and knowledge with the outside world. Over the year these external-liaison and outreach activities have included:

  • Dealing with 16,706 enquiries to our technical advice desk - our dedicated service for people handling complaints in the financial services sector and the consumer-advice world.

  • Handling 675 parliamentary enquiries and 34 ministerial questions, and producing a special mini-guide to our service for elected representatives such as MPs and councillors.

  • Organising visits, meetings and training for businesses we cover - including a relationship-management programme involving the 35 financial services groups that together accounted for 85% of complaints referred to the ombudsman service during the year.

  • Running our industry steering-group and our industry panel; hosting our smaller-businesses forum; and holding workshops and seminars around the UK for financial businesses and claims-management companies on a range of topical complaints-related issues.

  • Holding 17 regional training-days for community and advice workers - from Plymouth to Glasgow, Belfast to King's Lynn - to share our complaints-handling skills with front-line problem-solvers in the community; and hosting our quarterly consumer-liaison forum for representatives from consumer groups.

  • Taking our exhibition stand to key consumer events, including the Caravan and Motorhome Show, the Gadget Show Live, the Balmoral agricultural show in Belfast and the Welsh National Eisteddfod.

  • Speaking at seminars and conferences hosted by organisations ranging from the Association of Professional Compliance Consultants to the Money Advice Trust.

  • Targeting specific audiences - those less likely to use, or be aware of, the ombudsman service - including advertising on underground stations in Glasgow, on buses in Northern Ireland, in the South Wales Argus and on the OneIndia online portal.

  • Adding or updating 2,073 pages of our website - including 143 news updates, increased video content, and more feedback channels for user ratings and comments.

  • Publishing 10 issues of our newsletter, ombudsman news; distributing 700,000 copies of our consumer leaflet, your complaint and the ombudsman; and handing out 3,000 copies of our mini-guide for community advice workers, 3,000 copies of our guide for smaller businesses and 4,000 EasyRead leaflets.

  • Answering media questions and providing information for publications ranging from Farmers Weekly to Structured Products magazine - and taking part in over 50 broadcasts, from Radio 1 Newsbeat to Sunny Govan community radio.