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ombudsman news

issue 94

June / July 2011

ombudsman news "Q&A" page

Should adjudicators have specific financial-advice qualifications?

The ombudsman service makes its decisions fully in accordance with the law. The law was laid down by the UK Parliament in the Financial Services and Markets Act 2000, when it established the ombudsman service as an alternative to the courts - but subject to oversight by the courts through judicial review.

Our adjudicators and ombudsmen do not give financial advice. Their role is to settle disputes - and this involves different skills. These skills - which are equally important for judges and magistrates - include the ability to stand back and listen to all sides of the story, weighing up the arguments to arrive at decisions fairly and impartially.

Individual judges and magistrates are not required to hold a qualification in the subject matter of every case they try - or to list their qualifications to demonstrate their ability to do the job. Similarly, we don't require our adjudicators to list their individual qualifications (which range from the 'G60' pensions qualification to legal qualifications).

All our staff have access to the wealth of legal and financial services expertise available within the ombudsman service. If, in an individual dispute, either side is dissatisfied with an adjudicator's decision, they can of course ask for the case to be reviewed by an ombudsman.

Can you tell me more about the maximum compensation from the ombudsman increasing to £150,000?

In May 2011 - following public consultation - the Financial Services Authority (FSA) confirmed a package of measures to improve the way that the financial businesses it regulates handle customer complaints. These new rules for handling complaints include:

  • abolishing the so-called 'two-stage' complaints process - unfairly used by some businesses to make it more difficult for consumers to pursue complaints;
  • requiring businesses to identify a senior individual responsible for complaints handling; and
  • requiring businesses dealing with complaints to take account of previous ombudsman decisions and customer complaints.

At the same time, the FSA also increased the maximum compensation that the ombudsman will be able to tell businesses to pay - from £100,00 to £150,000. This will take effect for complaints we receive from 1 January 2012. The £100,000 limit was first set in 1981 by our predecessor scheme, the Insurance Ombudsman Bureau - and it has not been increased in thirty years. We have updated our consumer leaflet, your complaint and the ombudsman, to reflect this change.

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.