The Association of Consumer Support Organisations (ACSO) responded to the Financial Ombudsman Service (FOS) consultation on its draft plans and budget for 2021/22.
Matthew Maxwell Scott, executive director of ACSO, said “Covid-19 and the measures put in place to mitigate its spread have led to significant changes to the way businesses operate. The rapid introduction of flexible homeworking, coupled with the significant resources required to support consumers through the pandemic, has led to financial challenges for many businesses.
“The operational challenges for financial service providers has understandably led to an increase in consumer complaints. As noted in the consultation paper, businesses have struggled to deal with complaints within official complaint-handling timescales, which has led to an increase of cases referred to FOS. These complaints often involve parties in serious financial difficulties and often have other complicating factors. As a result of the above, FOS expects to enter 2021/22 with more people waiting for a response, with the difficult task of prioritising cases where help is needed urgently.
“Although it is difficult to accurately predict how the volume of complaints received by FOS will change over the coming financial year, it can be argued that given the majority of businesses have adjusted to remote working they are now better prepared to handle complaints internally, unlike during the initial lockdown in March 2020.”
Maxwell Scott continued, “ACSO has engaged with FOS on complaints relating to legal expenses insurance (LEI). The proportion of LEI complaints comprises a very small fraction of the total number of complaints received by FOS. For example, in the second quarter of 2020/21, the number of new LEI complaints (180) made up just 0.26 per cent of the total number of new complaints (68,735). It should be noted that the value of LEI as a means to access justice and reduce unmet legal need is likely to significantly increase, not least owing to the reforms that will be brought by the implementation of the Civil Liability Act (CLA), currently due in May 2021. If the LEI sector undergoes significant growth, as is expected, there is potential for an increased number of LEI-related complaints as the product becomes more widely used. In order to ensure LEI products meet consumer needs, the sharing of data and insights is essential. As such, we welcome our continued work with FOS to promote best practice, eradicate malpractice and ultimately improve consumer outcomes within the LEI market.
“Through the ACSO Claims Management Working Group, we work to ensure there is effective and proportionate regulation of claims management companies (CMCs). Combined with better self-regulation and the identification and adoption of best practice, this will encourage competition and promote good consumer outcomes by increasing choice, transparency and high-quality products and services. As with our focus on the LEI market, we are keen to engage with FOS on the CMC sector to identify the causes of CMC complaints, including any systematic or common issues, and promote best practice within the sector.”
ACSO members can read the submission in full on the members’ area of the website.