Independent review of FOS ‘Dispatches’ claims

dispatches inquiry

An independent review of the Financial Ombudsman Service (FOS) is to examine claims made in the recent Dispatches investigation that some consumers appeals were not dealt with correctly.

But Chief Ombudsman Caroline Waynman has said she is extremely unlikely to re-open any of the cases in question because of ‘strictly limited powers.’


The review was announced after Nicky Morgan MP, chair of the prestigious Treasury Select Committee, wrote to Ms Waynman about the issues raised in the Dispatches programme.

Mrs Morgan said: “The FOS is essential in underpinning consumer confidence in the financial services industry, and in redressing the power imbalance between large financial institutions and their customers.


“It is troubling, therefore, that cases may not have been decided correctly.”

She added that the review should consider FOS’s approach to decision making, the assurance process and the causes of low staff morale reported in the programme.

Commenting in the review process the said: “The review should be demonstrably independent, all findings of the review should be published, and the committee will expect to take evidence from the reviewer.”


FOS is an independent intermediary whose role is to examine cases where banks and consumers cannot agree and decide, on balance, who is in the right.

It deals with many different products, but more than half its workload involves appeals on payment protection insurance – PPI


The Dispatches programme alleged that the sheer volume of PPI appeals created a massive backlog in the system that FOS struggled to handle.

An undercover reporter went through the FOS training programme and uncovered allegations that cases appealed by consumers were not properly investigated because there were not enough properly trained staff to handle the volume of work.

Whistleblowers admitted it was easier to find in favour of the banks and reject the appeals, sometimes without even making a full and proper investigation of the facts.


In response, Ms Waynman said the FOS board would appoint an independent person to ‘better understand and address the concerns raised’ by Channel 4.

She said: “We feel very strongly that the concerns voiced in the programme do not give a fair impression of the Financial Ombudsman Service when seen against the overall breadth and context of our work.”

Re-opening cases

On the issue of re-opening cases she said: “The circumstances in which we can reconsider a complaint are extremely limited.

“We may, however, consider the matter afresh if material new evidence subsequently becomes available which the ombudsman considers likely to affect the outcome.

“And, as a public body, our decision-making is of course subject to judicial review – which means our decisions come under scrutiny by the courts.”

Evidence already exists

Nicky Morgan believes that evidence already exists.  She said: “The Dispatches programme raised concerns about the FOS’s decision-making and governance.

“These have been echoed by correspondence received by the committee from current and former FOS employees, who have also expressed dismay about poor culture and low morale.

“As Ms Wayman says, it’s right that cases be reopened if there is any new evidence that might affect the outcome. That must surely include failures in the FOS’s own processes.”

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