The FCA set high value complaints as complaints in which the service determined that fair compensation surpassed the award limitation. According to the operator, there could be approximately 2,000 such complaints each year. The FCA estimated that the shortfall in redress due to this award limit could be as high as #113 million each year.
- #350,000 for complaints regarding acts or omissions by firms on or after April 1, 2019;
- #160,000 for complaints regarding acts or omissions by companies before April 1, 2019, and that are known to the ombudsman service then date.
The ombudsman agency’s award limit sets the maximum amount of financial compensation which the ombudsman service can require firms to pay when it upholds complaints against them. There is not any limit on the amount the service can advocate and companies can decide to pay the gap.
The regulator also has considered the feedback to its consultation paper on the planned increase, and further improved its comprehension of the potential effect on particular sectors, especially the financial information market. However, this has not changed the FCA opinion an award limit increase is necessary. The regulator is, thus, implementing its suggestions as consulted on.
Most responses on the #350,000 limit suggestions came from private investment companies (PIFs), particularly small independent financial advisors (IFAs), along with insurers providing professional indemnity insurance (PII) to these firms. These respondents did not support any increase to the ombudsman agency ’s limit, mainly due to the possible influence on the PII industry.
Therefore, on April 1, 2019, the ombudsman agency’s #150,000 award limit will change to:
At the surface of the adverse feedback from certain sectors, the FCA is pressing ahead with the projected increase in the award limitation.
The UK Financial Conduct Authority (FCA) has previously now published its Policy Statement regarding its aims to boost the award limit for the Financial Ombudsman Service (FOS).
For any complaints referred to the ombudsman service before April 1, 2019 the limit will stay at #150,000.
The article FCA to execute planned growth in Financial Ombudsman Service award limit appeared first on FinanceFeeds.
Back in CP 18/31, the FCA said it considered the 150,000 award limit to be inadequate in light of this information on the quantity and value of’high worth complaints’ handled by the ombudsman service.
General insurance companies — another main respondent group – tended to dispute both the FCA on if this type of large, solitary increase was necessary. They also challenged the ability of the ombudsman support to cope with more complex circumstances. There was qualified assistance in the banking industry to get a #350,000 limit. Parliamentarians, and organisations representing consumers and non-financial small businesses advocated a greater limit compared to 350,000.
Consultation Paper (CP) 18/31, printed in October 2018, has been the first review of this ombudsman agency‘s award limit considering 2010, when the FCA increased the original limit from 100,000 to #150,000.
The FCA received 130 responses to the consultation paper. The focus of opinions was, as expected, the proposal for a 350,000 award limitation. The suggestion to ensure the award constraints maintain pace with inflation established relatively uncontentious.