The UK finance supports the call for financial ombudsman services to block the call as a “quasi-regulator” and stick to a timeline for reforming the body.
The move comes from banking institutions submitting to the government ahead of a luxury speech by principal Rachel Reeves later this month, as well as a Treasury’s financial services growth and competitiveness strategy document.
The Treasury Department is currently reviewing the agency’s responsibilities, which resolves disputes between financial companies and consumers, a move first announced in the spring.
However, the UK Treasury said: “We strongly welcome the government’s attention to reform of the financial ombudsman service and the fact that decisions beyond FCA rules create legal uncertainty and see the fact that the Ombudsman uses it as a quasi-strategy.
“Providing certainty and stability in this and other behavior-related reforms will enable businesses to innovate for the benefit of consumers.”
The trade agency said older dispute regulators should have time limits and asked for a “reform timeline” for the service.
It added that legislation that should be held in the fall “should be further reformed in the speech of the next king”.
Bawa wrote to Emma Reynolds, the Treasury’s economic secretary, and said the department supported the claim management company’s “growing complaint industry and culture in UK financial services”, “which will not promote confidence in our industry or support growth.”
The Treasury said Reynolds will examine whether the Financial Ombudsman Service “plays its role as a simple, impartial dispute resolution service, quickly and effectively handles complaints against financial services companies and works with our Financial Conduct Authority, which regulates the industry.”
The Treasury Department said Reynolds will look at three key issues:
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FOS runs the framework, which sometimes leads to its function as a quasi-regulator
A spokesperson for the Financial Ombudsman Service said: “We are an independent dispute resolution service designed to provide the courts with the lowest form of alternatives – last year alone, we have provided fast and high-quality resolutions to thousands of consumers, small businesses and financial companies.
“We agree that after 25 years of operation, it now marks an opportunity to review the entire system in a timely manner.
“That is why we work closely with the Financial Conduct Authority and the Ministry of Finance to ensure that the system, including the crucial role in our services, is suitable for the future.”
