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The Financial Ombudsman Service: reviewing some aspects of its operation and its interaction with the Financial Services Authority (FSA)

2 December 2003

In her statement on 4 November, announcing details of HM Treasury's review of the effectiveness of the Financial Services and Markets Act 2000 (the "N2+2 Review"), Ruth Kelly, Financial Secretary to HM Treasury, also announced that the Financial Ombudsman Service and the Financial Services Authority were being asked to take forward the aspect of the review concerning the ombudsman service. The review is to cover the way that the ombudsman interacts with the FSA's regulatory responsibilities and the work of the other bodies with regulatory responsibilities; and to consider the case for amending the process by which firms may appeal against ombudsman decisions.

The FSA and the ombudsman have appointed a group of expert stakeholders to oversee, in the early part of next year, the scope, terms and conduct of the consultation process overall and to have input into the shaping of the consultation document. The Review Oversight Group is to be chaired by Colin Harris, chairman of the Mortgage Code Compliance Board. The other members are: Matthew Bullock of the Financial Services Practitioner Panel; John Howard of the Financial Services Consumer Panel; Roger Sanders of the Small Business Practitioner Panel; and Diana Wright, personal finance writer for the Sunday Times.

Subject to the views of the Review Oversight Group, it is expected that the review will begin by asking key stakeholder groups, trade associations and consumer bodies for their experiences and observations. This will allow an informed public consultation exercise to be undertaken early in 2004. The overall "N2+2 Review" is expected to be completed by November 2004. As the Financial Secretary indicated, the importance of the ombudsman to consumer protection is such that any changes to the regulatory structure should only be made after careful consideration and consultation.

At the same time, the ombudsman intends to commission an independent assessment of its work, and will be consulting the Review Oversight Group about the scope of this exercise.

Review Oversight Group members

Colin Harris

Chairman, Mortgage Code Compliance Board. Colin Harris was previously managing director (Financial Services) with Legal & General and chaired the CML/Intermediary working group to extend coverage of the mortgage code to intermediaries. He was appointed chairman of the MCCB council (now board) in March 1998. He is a past member of the Further Education Funding Council, a lay member of the Law Society Council, a member of the National Audit Committee of the Learning and Skills Council and a director of Surrey Learning and Skills Council.

John Howard

A solicitor with extensive experience of consumer issues as a presenter of the daily consumer programme on Radio 4, You and Yours. He is currently a freelance journalist and broadcaster and a member of the Mortgage Code Compliance Board. He was appointed to the Financial Services Consumer Panel in October 2000.

Matthew Bullock

Group chief executive of Norwich and Peterborough Building Society. Matthew Bullock was previously at Barclays. He is chairman of the Advisory Board of the ESRC Centre for Business Research at Cambridge University. He was a past member of the Industrial Advisory Board at the DTI.

Roger Sanders OBE

Principal of Roger Sanders Associates - employee benefits consultant and IFA. Roger Sanders was a former member of the board of the Personal Investment Authority (PIA) and director of the PIA Ombudsman Bureau until 2000. He has been joint chairman of the FSA Small Business Practitioner Panel and a member of the Financial Services Practitioner Panel since 1999.

Diana Wright

Freelance personal finance journalist - previously editor of the Sunday Times' money section for 10 years. She now writes a regular column, A Question of Money, for the Sunday Times - dealing with readers' financial problems. She is also a council member of the Ombudsman for Estate Agents.

media enquiries

  • David Cresswell – Financial Ombudsman Service: 020 7964 0134
  • Rob McIvor – FSA: 020 7066 3262

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