Is the FOS turning against consumers?

September 14th, 2010

Interesting news has emerged this week about the much vaunted Financial Ombudsman Service (FOS). The number of complaints made about financial firms to the FOS rose in the first half of the year. However, they sided with the consumer in a smaller proportion of resolved cases than previously.

The FOS received 84,212 new complaints, with more than half about five major banks.
The bank with the biggest branch network in 2009, Lloyds Banking Group, headed the list with 12,750 new complaints made about it by customers.

The FOS saw the total number of complaints made to it rise by 2,076 in the first half of the year compared with the previous six months.

In the first six months of 2010, the FOS upheld 44% of complaints in favour of the consumer, compared with 53% in the second half of 2009.

However, with many complaints about unauthorised overdraft charges being ruled out, fewer resolved cases ended with compensation for customers.

The overdraft charged case was unique and has been covered on this blog extensively and so the new figures do not necessarily mean that the FOS is reverting to watchdog type and taking sides with the industry it is supposed to regulate.

Consumer advocates and this blog will be keeping an eye on it though, just in case.

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