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Quotations
from FOS staff
These direct
quotations from letters and other sources give a view of FOS style
and policy
All correspondence, emails and/or details
of these quotations are in my possession
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Sarcastic
I must thank you
first of all for setting out your position so clearly, because
it makes it so much easier for me to highlight where I think
the two fundamental differences of opinion arise between us...
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Patronising
(and wrong !)
After explaining
something...
I am not sure how clearly you may have grasped this
distinction - the firm's presentation may have confused
you.
In fact the writer was
the one who was confused, see next panel down
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Insulting,
when I asked for further explanation
"Having
read through (your emails) I have nothing at all to add to
what I have previously said, and in particular I am at a complete
loss to know what further elucidation or explanation I could
possibly hope to proffer. I am not prepared to devote
additional time and effort towards further elucidation which
I am far from confident will meet with either your understanding
or acceptance"
As it turned out this
arrogant and petulant man was wrong and so was the Ombudsman,
my understanding of the situation was correct. Both were later
over-ridden by the Principal Ombudsman and FOS repaid tax
deducted in error, but only because I spotted the problem.
No FOS procedures caught this mistake, which was a result
of the Ombudsman not spotting the incorrect deduction of tax
by the bank. I
should say that most of the people I dealt with at FOS were
very polite, but no organisation should allow employees to
use this kind of language.
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When I questioned the tax
treatment of the case the Ombudsman's view was...
"I
do not think there are grounds to ask the firm to reduce
the (tax) deduction to zero on any proportion."
But later the Principal
Ombudsman said...
"I do not
consider that the compensation for this period should
have been treated as subject to deduction of income tax
at all"
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When I asked why FOS accepted an
offer from the bank that was
£8000
below the
FOS guideline figure
"Our published guidelines... say what
we do about interest when fixing redress. They
do not purport to tell businesses what they must do when making
offers.
Although it is, perhaps, implicit that
an offer significantly out of line with what we ourselves
would do might result in our making a different award, our
senior Ombudsman is satisfied that in the present case, we
did not have to readjust the interest offered to be exactly
in line with what we would have awarded had we needed to."
It seems FOS do not consider £8000
to be "significantly out of line".
The Independent Assessor agreed with me...some tax was repaid,
but this still left us £4800 below the FOS guideline
figure...see below
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When
the Independent Assessor agreed that I had a point, (FOS service
standards had not been followed as they had ignored FOS guidelines),
and asked FOS to reconsider their approach
" I consider
that there is some force in the points you make in your letter,
in particular the fact that a shortfall in compensation of
approximately £4800, as a result of the interest rate
element in the firm's offer being calculated at bank rate
rather than bank rate + 1%, can hardly be regarded as an
insignificant amount and therefore reasonable compensation
in the circumstances"
but later he was brushed
aside...
" I was initially
optomistic that the FOS might have been prepared to settle
the matter to Mrs xxx's and your satisfaction. However
the response I have received from the Principal Ombudsman
has left me in no doubt that FOS would not have accepted any
recommendation I might have made on the interest rate issue."
Basically,
the IA thought I had a case, but FOS declined to answer his
questions and in any case, as the Principal Ombusman pointed
out...FOS were not going to do anything about it regardless
of what he said.
This
is important because it shows the FOS regards itself as above
criticism and able to brush aside the Independent Assessor.
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What an
article on FOS website says about inheriting a portfolio
"The fact that Mrs B had inherited
a portfolio of shares did not make her an experienced or knowledgeable
investor"
(Illustrative Case 48/13)
But in practice
things are a little different.
When my Aunt, living alone at age 70+ yrs, inherited a portfolio,
having never previously invested in anything except bank and
building society deposits, and never traded any shares, the
Adjudicator said...
"We refer to investment experience
when a person has experience holding an
investment....If a person has held a portfolio of shares for
several years it is likely that the portfolio has suffered
some degree to loss/fluctuations and therefore the investor
does understand the levels of risks associated with these
investments"
(FOS case no. 5156222/KM/46)
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What FOS says
about interest rates to be used, and what the Adjudicator
and Ombudsman think on the subject
"For cases
where the alternative suitable investment
is not known,
we are likely to require the firm to calculate the difference
between how the unsuitable investment actually performed
and how some alternative suitable investment would have
performed to date – assuming a return on the amount
invested equivalent to the Bank of England base rates during
the relevant period plus 1%,
compounded yearly from the date of investment."
Link to the FOS
guide which includes the above statement "A
quick guide to calculating redress in investment complaints"
But the Adjudicator
and Ombudsman ignored the above guidance.
" The firm has used an average
of the Bank of England's base rate for each year. Since
I have no way of knowing
exactly where the monies would be
invested I consider
this is an acceptable method to calculate redress and is
a method we commonly use."
The Independent Assessor agreed with me,
but it FOS declined to answer his request to review to matter
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Chief Ombudsman, Natalie Ceeney's
advice to applicants for the new post of Director of Finance
and Performance
"If
you don't know the financial services sector, don't let
that stop you applying".
"We're not taxpayer funded so should not be affected
by public sector funding reductions".
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Last Chief Ombudsman, Walter Merricks,
on how FOS works
We
do not have to pretend to find what the law is. We unashamedly
make new law
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