The Finance & Leasing Association has today welcomed the publication of various consultations about reforming the UK redress system.
The joint consultation between the Financial Ombudsman Service (FOS) and Financial Conduct Authority (FCA) includes proposals to ensure consistency in the interpretation of regulations, while the Treasury consultation proposes to introduce a ten year backstop for FOS complaints, and to adapt the Fair and Reasonable test so that firms can have confidence that, where conduct complained of is in scope of FCA rules, compliance with those rules, in accordance with the FCA’s intention for what those rules should achieve, will mean that the FOS is required to find a firm has acted fairly and reasonably.
Also, the FOS has announced that, having previously consulted on the interest rate it applies to compensation awarded to consumers, it now intends to change that rate from the longstanding 8%, to Bank of England Base rate +1%.
Stephen Haddrill, Director General of the FLA said:
“The direction of travel contained in these proposals show a much more certain, consistent and confident dynamic between the FOS and FCA, which will benefit firms and consumers alike.
“I commend the Government and individual bodies on the speed and determination with which they have begun to change dysfunctional regulatory relationships.
“We look forward to working with Government, the FCA and FOS to ensure these changes are implemented as quickly and effectively as possible. The credit industry is vital to the health of the economy and how people manage their individual budgets – the sooner these changes come into effect, the more the industry can do to enhance even further its contribution.”
