Investigation at FOS finds staff with severe lack of training



Dispatches Undercover: Who’s Policing Your Bank? Monday 12th March 8pm Channel 4

A Dispatches undercover investigation at The Financial Ombudsman Service has found that staff with inadequate training or understanding of financial products are judging cases, with some having reached decisions in favour of the banks, without properly reading case files.

This could mean hundreds of thousands of cases may need to be looked at again.

The FOS adjudicates on disputes between consumers and financial institutions. It is contacted by more than a million consumers a year.

However, current and former staff - including senior managers - have told Dispatches there are big problems at the service, including a lack of training and, in the past, unachievable targets. Meaning they could have got hundreds of thousands of decisions wrong.

Dispatches showed its evidence to former pensions minister Baroness Ros Altmann, who called on the Government to take action:

“That’s hundreds of thousands of people… who appear not to have been treated as fairly as you would wish from the ombudsmen service.”

“I think the government should urgently look at and ask for the management of the financial ombudsmen service to justify some of the evidence that we’ve seen here.”

The FOS says it has a customer satisfaction rating of 75 per cent and is determined to produce a trustworthy service for its customers.However, the insiders, who have asked to remain anonymous to protect their identity, told Dispatches:

Insider 1: “Training was not adequate. We rushed through complicated financial issues and processes. I often didn’t know what I was doing.”

Insider 2: “I’m not proud to admit it but I’ve done it myself – just taken a chance and just slung stuff through, with any old decision.

“For more complex cases, the right decision isn’t always reached. Legitimate claims are being missed.”

The FOS is answerable to the Treasury Select Committee. One of its members, MP Rushanara Ali told Dispatches the service had questions to answer:

“The ombudsman needs to demonstrate that they have satisfactorily dealt with cases in the past…If they can’t do that then…members of the public will want to go back and have their cases reviewed where appropriate.”

She added:

“...They are accountable to parliament, they are accountable to the public and they'll need to explain themselves.”

“…I would hope that our committee can call them back in and if necessary conduct an inquiry in to these allegations.”

Ruth Campbell thought she had a legitimate complaint against her bank who she felt hadn't protected her properly when scammers made off with £29,000 from her account.

She turned to the FOS for help. However their judgement was that it was her own fault.

Ruth Campbell: “It was money for the future, it was money for my family for if I needed to go into a care home and to suddenly lose that was just horrific. Horrific, life-changing.”

Ruth consulted a fraud expert, Richard Emery, who discovered on further investigation that the FOS had not produced a timeline of transactions.

The timeline revealed that the bank had had opportunities to stop the fraud. He said:

“It is regrettably all too common for me to be in a situation where the investigator has not asked for the correct information from the bank.”

Another claims advisor, Mark Davies told Dispatches he thinks huge numbers of PPI cases need to be individually reconsidered. He believes the FOS accepts PPI was often sold without customers being given the full facts, but still turns down hundreds of thousands of these claims. He said:

“…That very clear and specific problem has affected, our analysis indicates, in excess of half a million complainants.”

Lack of training

Dispatches sent an undercover reporter to work as trainee investigator, her job was to resolve disputes in favour of either the company or the customer.

She was placed on a recently-introduced training course, where instructors told her that, whilst some staff have financial backgrounds, others do not have the knowledge to deal with complex financial problems:

Mentor: “Some people have been thrown in with no training at all.”

Trainer: “There were people there who had no idea, no idea about any products, anything, anything about complaints at all.”

Staff admit to the reporter they've not had enough training, including an investigator she is shadowing, who says, even after 18 months in the service, she sometimes doesn't know what she's doing:

“Been doing this a year and a half…went to my first investment training session yesterday and was saying to the girl who was running it, even now I look at an investment case and I don’t know what to ask for.”

“... Sometimes I’ve not even heard of the products. I have to Google what it is first.”

Dispatches showed the footage to former Pensions Minister Baroness Ros Altmann and former Which head of money and director of consumer group Fairer Finance, James Daley.

Baroness Ros Altmann: “I don’t see how anybody can think it’s acceptable that the people who are making those judgments don’t know the detail…it is crucial.”

James Daley: “That absolutely doesn’t seem right these are complicated products and any adjudicator or ombudsman that’s involved in cases, arbitrating in decisions needs to know that subject area inside out.”

Have the wrong decisions been made?

As well as problems with insufficient training, insiders say a major backlog of cases built up in 2014/2015 - in part due to the level of PPI claims. When the FOS realised it had a problem, its investigators had to take on more cases. If they missed a target, their pay and promotion could suffer.

Insider: “11,000 cases fell into a black hole. Two years later we find out they’ve not been looked at and we had to work our way through them all.”

“Some post was two years old. There were cases saying I am going to lose my house.”

Our undercover reporter was told that there was pressure on staff to deal with caseloads fast and this may have meant cases weren’t dealt with properly.

Investigator: “You just can’t do it. Banking complaints are just horrid, having to work out what happened, it’s just not feasible – it really isn’t.”

Undercover reporter: “And do you think it has, it had an effect in terms of your ability to go through each case properly and handle it as you should be?”

Investigator: “Massively. Massively. You were just churning them out…”

Dispatches understands that this added pressure could have led to the bank being wrongly favoured. Our undercover reporter asked the investigator she was shadowing about it:

Undercover reporter: “So - like - if you’re under pressure, you’re more likely to meet your targets if you’re not upholding them?”

Investigator: “Yeah, because you just need to make one call to the consumer, rather than trying to persuade the business, which is actually a lot harder.”

Our whistleblowers told us they had had similar experiences:

Insider 2: “I have done it - had cases where I’ve not done full thorough checks.”

Insider 1: “I’m not proud to admit but I’ve done it myself – just taken a chance and just slung stuff through, with any old decision.

“Colleagues also admit they ‘fling it through’. This usually means in favour of the bank. It just makes it easier.”

The FOS has now reduced those targets temporarily. But what about the previous cases that could have been mishandled?

James Daley said:

“I think it’s a toxic combination isn’t it, the combination of a lack of training at the same time as piling pressure on adjudicators to get through cases.”

Why were problems not detected?

In 2015 MP Rushanara Ali, did visit the FOS. But Dispatches has been told that Ms Ali was misled. Insiders say managers pre-selected and rehearsed cases to make the service appear more professional.

Insider: “We ‘managed’ some of the visit to make the service look better than it was.”

“There was a fake case handling session…to show that the adjudicators and ombudsman were working together.”

“It was an executive attempt to hide the fact people did not know what they were doing.”

We relayed this testimony to MP Rushanara Ali who said:

“….If they tried to pre-cook or rehearse or inappropriately mislead me or any other visitor…I’d be very disappointed and would expect them to explain themselves.”

The FOS says it is open and transparent about its work.

Bias against consumers?

Our undercover reporter attended a drop in session for staff to discuss cases with experienced investigators and Ombudsman Managers.

On payday loans, the seniors didn’t sound impartial:

Experienced investigator: “…Completely stupid, I don’t know why you’d do them have to get statements – really boring expenditure statements.”

Ombudsman manager: “Yes, I never really got that far when I was doing payday loans – I wasn’t very sympathetic… you borrowed 100 quid, you were struggling what else were you going to do, where’s the problem - they’re called payday loans for a reason.”

Experienced investigator: “There’s only so sympathetic they can be, if you aren’t going to stop shopping in Selfridges.”

After watching the footage Ros Altmann said:

“No account taken of the circumstances, perhaps the mental health of the person who is taking out that loan, or the way in which it was sold to them. I mean that is truly shocking and I would say utterly unacceptable.”

Writing off debt

If businesses lend irresponsibly to vulnerable people - especially the elderly or those with mental health problems - the FOS has the power to order them to write the debt off.

However the reporter attends another drop-in session and discovers that FOS staff are very hesitant to demand that banks write off debt:

Our reporter seeks out the trainer to find out why:

Trainer: “The problem is our decisions are published and one person’s mental health condition is going to be very different from someone else’s – but someone like Citizens Advice, sees our published decision...everyone will latch onto it, cause everyone wants their debt written off when they get into trouble.”

Undercover reporter: “So it’s like a floodgates argument?”

Trainer: (Nods) “And that’s why we’re wary about saying you have to do this. Cause it’s better just to appeal to the business’s nicer side.”

After viewing this footage Ros Altmann said:

“I mean that was utterly, utterly shocking to me.”

James Daley said:

“What they are saying there is that they don’t want to set a precedent, well they should be setting a precedent. There will be circumstances where it is absolutely right to write off the debt and that should be on the ombudsmen decision database so that everybody can see and the message is very clear to the industry if you act like this we may ask you to write off that debt.”

The FOS says it has a customer satisfaction rate of 75 per cent. In response to the findings it told Dispatches:

“The impression given is clearly not representative of us at our best.

“Our people are committed to doing the right thing and we always want to know how we can improve.

“We’re determined to provide the best support for our staff and a fair and trustworthy service for our customers.”


Notes to Editors

***Any use of information in this release must credit Channel 4 Dispatches**

Dispatches Undercover: Who’s Policing Your Bank? Monday 12th March 8pm Channel 4

Reporter: Morland Sanders

Prod: Luke Mendham

Exec Prods: Steve Boulton, Mike Lewis

Prod co: Nine Lives Media

Stills and video clips available on request.

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