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ombudsman news

issue 65

October/November 2007

the ombudsmen of the Financial Ombudsman Service

this month's ombudsman focus answers some of the questions we're most frequently asked about our ombudsmen

who exactly is "the ombudsman"-

We actually have not just one ombudsman but a panel of them. This is headed up by our chief ombudsman, Walter Merricks, together with the two principal ombudsmen - decisions director, Tony Boorman, and corporate director, David Thomas. Alongside them are our four lead ombudsmen and 24 ombudsmen.

how does someone get to be an ombudsman-

Appointments to the statutory panel of ombudsmen are made under paragraphs 4 and 5 of schedule 17 of the Financial Services and Markets Act 2000. These appointments are made by our board of non-executive directors, who are themselves appointed as public-interest members on terms that secure their independence from those whose disputes we settle. The board is required by law to appoint ombudsmen who have appropriate qualifications and experience - and they appoint ombudsman on terms that ensure their independence.

and what sort of experience do ombudsmen need-

Our ombudsmen come from a wide range of backgrounds, as can be seen from their biographical details on our website (in the section "about us"). Some have worked previously as solicitors or barristers - in private practice, a corporate environment or for a government department or agency.

Our panel also includes several former bank or building society managers and senior executives from other areas of financial services - as well as accountants and actuaries, and former regulators and compliance consultants. The diversity of experience our ombudsman panel can draw on is well-illustrated by the types of organisations where individual ombudsmen worked before joining us.

In addition to some of the UK's major financial and accountancy firms, this includes the Audit Commission, the Serious Fraud Office, the Office of Fair Trading, the Department of Business, Enterprise and Regulatory Reform, the Association of Certified Chartered Accountants, Lloyd's of London, the Law Society, the Insolvency Service, the Office for the Supervision of Solicitors, the Police Complaints Authority, Ofgem (the energy regulator) and Ofcom.

A number of panel members also gained valuable experience in one or other of our predecessor complaints-handling organisations - such as the Office of the Banking Ombudsman, the Insurance Ombudsman Bureau, the Office of the Building Societies Ombudsman and the Personal Investment Authority Ombudsman Bureau.

what's the role of ombudsmen in complaints-handing-

Our process for handling disputes between consumers and financial services companies is designed to ensure that as many as possible of the cases referred to us can be dealt with at an early stage.

The vast majority of these disputes are resolved informally by our adjudicators. But in around one in ten cases it is not possible to reach an agreement between the customer and the financial services business. So here we appoint one of our ombudsmen to review the case and make a final decision.

When an ombudsman becomes directly involved in a dispute at this stage, they will carry out their own independent review of the complaint before issuing a final decision. This is the last "appeal" stage of a procedure that will have involved a number of reviews - at increasing levels of formality.

It is the end of our process and neither the business nor the consumer can appeal against an ombudsman's decision by going to another ombudsman. Even the chief ombudsman cannot alter an ombudsman's decision once it has been made.

As long as the consumer accepts an ombudsman's final decision - within the timescale set down by the ombudsman dealing with the case - then that decision is binding on both the consumer and the business.

If the ombudsman concludes that the business was in the wrong, then it is required by law to do what the ombudsman has decided is necessary to put things right for the consumer. In the unlikely event that a business fails to comply with the decision, the consumer can go to court to get the decision enforced.

where does the ombudsman get the power to make these decisions-

These powers are set out in the Financial Services and Markets Act 2000 and they include the power to instruct a business to do what is necessary to put things right for the consumer, where the business was in the wrong.

Depending on the individual case, this could involve anything from telling the business to amend incorrect information on a customer's credit-reference file through to paying a customer compensation. The ombudsman has the power to require the business to pay up to £100,000 (plus interest) and the ombudsman can recommend that larger sums are paid.

But in most cases where an ombudsman tells a business to pay compensation to its customer, the amount involved is much less than this.

do different ombudsmen have different roles-

All our ombudsmen - whatever their official job titles - are members of the statutory ombudsman panel and have the same powers in handling individual cases. In practice most of our ombudsmen specialise in deciding cases in a particular area of casework.

The ombudsmen working in each casework area meet weekly to discuss issues that are specific to that sector. And the entire panel meets regularly to enable the ombudsmen to discuss issues arising in complaints - so as to share knowledge and help ensure consistency of approach.

The four lead ombudsmen - Jane Hingston, Peter Hinchliffe, Caroline Mitchell and Caroline Wayman - are specifically responsible for the four main areas of our casework - banking & credit, insurance, investment & pensions, and mortgage endowments respectively. They lead the ombudsman teams working in these casework areas and keep in touch with our stakeholders in their sector.

The two principal ombudsmen have very specific roles. Decisions director, Tony Boorman, supports the chief ombudsman by managing the teams of ombudsmen, co-ordinating their work and ensuring the consistency of approach and decisions across all areas of our casework.

Corporate director, David Thomas, supports the chief ombudsman in the area of corporate policy. This includes strategic planning; legislation and rules; relations with government, regulators and the European Commission; our process for considering wider implications issues; and coordinating the work of our policy, legal and service review teams.

The chief ombudsman, Walter Merricks is - in effect - the chief executive of the Financial Ombudsman Service. He leads the senior executive team and is accountable to the board for the performance of the organisation as a whole. So he rarely gets involved in individual cases - and then only if they are cases of particular significance and wider implications. But he is, of course, involved in managing the impact of different areas of complaint, and of major financial issues affecting consumers.

how do ombudsmen and adjudicators work together-

In addition to extensive experience in all aspects of dispute-resolution, each of our ombudsmen has specialist subject knowledge, ranging - ombudsman to ombudsman - from medical insurance to consumer credit.

The ombudsmen hold regular meetings with adjudicators, to keep everyone up-to-date with legal and regulatory developments and to help ensure a consistent approach to the handling of individual cases. This also gives the ombudsmen the opportunity to learn about any emerging trends in the types of complaint that are just starting to reach us - but that have not yet escalated to a stage requiring an ombudsman's direct involvement.

can I get to meet the ombudsmen personally-

We resolve most disputes between consumers and businesses without the need for face-to-face meetings. But ombudsmen devote a significant amount of time to meeting stakeholders in the financial services and consumer-advice sectors - including speaking at seminars and taking part in media interviews.

and finally - no ombudswomen then-

The gender-neutral word "ombuds" is widely used in some parts of the world, including America and Australia. However, the word "ombudsman" - which is Swedish - is not itself gender-specific. We don't differentiate between ombudsmen and ombudswomen. But in case you were wondering, 10 of the 31 members of our panel of ombudsmen are women.

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ombudsman news issue 65 [PDF format]

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.