Source · Select Committees · Treasury Committee
Recommendation 4
4
Acknowledged
Paragraph: 32
Financial Ombudsman Service capacity for complex SME banking disputes remains a concern
Conclusion
We support the Financial Ombudsman Service in its role as the primary mechanism for SME banking disputes. We note concerns that the FOS is primarily equipped to deal with less complex cases but note the efforts undertaken by the organisation to improve specialist resource.
Government Response Summary
The government supports the FOS's role, noting its ongoing programme to improve service following a 2021 review, and commits to continuing regular engagement with the FOS to address operational issues and ensure aligned rules.
Paragraph Reference:
32
Government Response
Acknowledged
HM Government
Acknowledged
The Government also supports the work of the Financial Ombudsman Service (FOS). The FOS plays an important role in providing consumers and small businesses with a cost-free service that enables the proportionate, prompt and informal resolution of disputes with financial services firms. It is designed as an alternative to consumers and small businesses having to take a case against a firm to court, which would be expensive and time consuming for both parties. The FOS therefore provides firms with an extra incentive to comply with their regulatory requirements and provides consumers with confidence to invest in regulated products. As the Committee notes, the FOS is currently undertaking a programme of work to improve its service, following an independent review of its operational effectiveness in 2021. We will continue maintaining regular engagement with the FOS, addressing relevant operational issues, ensuring that FOS rules are aligned with the current financial services landscape, and facilitating effective cooperation with the FCA.