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ombudsman news

issue 4

April 2001

how we handle complaints

The ombudsmen for the different financial sectors have now been together under one roof for a year. All now work for the Financial Ombudsman Service - but continue to operate under the rules of the original schemes until the Financial Ombudsman Service's own rules come into force on the date we call "N2". The government has said this will be no later than the end of November 2001.

In preparation for the new regime we are introducing common complaint-handling procedures throughout the Financial Ombudsman Service. Our new procedures are designed to be flexible and we will want to maintain an active dialogue with both the firm and the customer in our handling of cases.

customer contact division

Our customer contact division (formerly enquiries) is the common point of entry for all customers, whether their complaint concerns an insurance, banking or investment matter. This division does not investigate complaints, but will check if there seems to be a good chance of settling the matter right away, without the need to convert the complaint into a case requiring investigation. This will be a progressive change and, of course, it remains a matter for the individual firm to respond initially to its customers' concerns in accordance with good complaint-handling procedures.

If, when the customer first contacts us, we conclude the firm has not had an adequate opportunity to respond to the complaint, we will contact the firm, setting out the concerns the customer has raised with us. We will ask the firm to resolve the matter and will tell the customer what we have done.

time limits for dealing with a complaint

We will ask firms to try to resolve complaints, or issue a "decision letter", within 8 weeks of the date the customer first complained to the firm. If those 8 weeks have already expired by the time the customer contacts us, we will:

  • notify the firm that we have received the case
  • take on the complaint
  • request the firm's case papers; and
  • make the case chargeable (one for which we charge the firm a fee) without further delay.

Of course, there will be situations where the firm may, unavoidably and for good reason, need extra time. For example, it may be awaiting an independent report from a surveyor or medical practitioner or the customer may have significantly delayed the process. In such cases and at the firm's request, we may recommend that the customer allows the firm extra time before we start our formal investigation. However, such requests should only be made in exceptional circumstances.

casework division

Our casework division will adopt a similar approach to case resolution to that followed in the customer contact division. If, once a complaint moves through to the casework division, the division thinks a case can be brought to an early conclusion, we will attempt to give an initial view of the case's merits by telephoning or writing to one or both parties, as appropriate. Again the aim will be to achieve a prompt conclusion.

Our assessment team (formerly the new cases unit) in the casework division, has, since last September, focused on the early resolution of cases through mediation. Insurers and customers have generally responded favourably. By placing greater emphasis on this initial stage of the process, we aim to resolve all straightforward cases at the assessment team stage. If appropriate, an ombudsman will make a decision where the proposed mediated settlement is not accepted.

Where we consider our assessment team cannot resolve a case by mediation, we will pass on the case to one of our adjudicators for a formal investigation. As now, the adjudicator will seek opportunities wherever possible to reach an agreed settlement by setting out an "initial view". An initial view is not binding and either party can ask for a full investigation. However, we may decline to carry out a full investigation if we feel the facts of the case are clear. In such instances, we may proceed instead to a formal decision by an ombudsman.

If, while we are looking into a complaint, either party raises any significant points, we may disclose them to the other party if we believe this will help the fair resolution of the dispute.

We expect to resolve most complaints through conciliation. However, for more complex or intractable cases, we will complete a full investigation During that investigation, the adjudicator will put points to the firm or the customer for comment, if this seems appropriate. When the investigation is complete, the adjudicator will issue a "conclusions letter" to both parties simultaneously. This will enclose a report setting out the main facts of the case and the adjudicator's conclusions, based on the merits of the case.

ombudsman's decisions

If the adjudicator's conclusions are not acceptable to both parties, the case will be referred to an ombudsman for decision. An ombudsman may sometimes consider it necessary for a fair resolution to first call a hearing, to consider material disputes about the facts of the case. When the ombudsman's "final decision letter" is issued, it will be sent to both parties, simultaneously, and, as now, there will be no appeal.

customer information

We have produced a new leaflet for customers, "taking your insurance complaint to the Financial Ombudsman Service: how we can help you". Or click here for details of how to obtain copies of this leaflet and our other publications.

getting ready

With the new rules in mind, firms should now be reviewing their own arrangements for handling complaints. For example, it will be important to ensure that formal decision letters mention the Financial Ombudsman Service as a potential avenue for the complainant wherever the matter seems to be one that might be within our jurisdiction.

If you need to know more about the new rules, and how they may affect your complaints-handling arrangements, we'll be happy to help. See the back page for more details.

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.