Even big businesses and organisations with immense resources and expertise can err sometime. Reasons behind these mistakes and errors could range from anything like lack of foresight due to the size of operations to simple incompetence of one of the employees. However, when such errors occur, it is the end user who faces the most difficulty. This is especially true in the case of financial organisations and businesses. While most large businesses have large departments for taking care of their customers’ complaints, sometimes, their resolution is not to the customer’s liking. If you have recently experienced such a scenario and are at a loss as to what you can do next then you should not worry because you have the option of using the financial ombudsman service.
What Is The Financial Ombudsman Service?
Many people do not realise that they can approach the official ombudsman service if a financial institution has not resolved their complaint satisfactorily. In fact, some are even ignorant of what the financial ombudsman is. The financial ombudsman service was established around 13 years ago in 2001 through the Financial Services and Markets Act – 2000. The mandate of the official financial ombudsman is to resolve discrepancies and differences between consumers and financial businesses operating in the United Kingdom.
The ombudsman service is free for all consumers as its funding comes from businesses in UK’s financial services sector through statutory levies. A supplementary avenue of funding for the financial ombudsman is also fees derived via cases. Despite of the source of its funding, the ombudsman service is entirely impartial in every case, regardless of its magnitude or the parties involved. This neutrality is crucial for the credibility of the financial ombudsman which means that it is maintained diligently. Essentially, the ombudsman service takes information from the consumer and business involved, studies the facts in terms of commitments and laws, and then provides its judgement.
Differences between the Financial Ombudsman Service and the Court
Because of the arbitrator – like nature of the financial ombudsman service, many people make the mistake of thinking that going to the ombudsman is similar to going to court. However, this is not true because of vast array of reasons. The ombudsman is a much more informal authority than the court which means that its judgements are not binding unless accepted by the parties involved. In simpler terms, after the ombudsman has given its decision about a case, its decision is only binding on the parties if the consumer accepts it.
Another difference between going to the ombudsman and going to court is in their respective scopes. The scope of the financial ombudsman is significantly smaller and more limited than the court. This is why the ombudsman service clearly specifies that it may not be suitable for those cases where upwards of 150, 000 pounds are involved. As is obvious, this is not the case with going to court where the magnitude of the case is irrelevant and all disputes are treated equally. It is also important to note that the financial ombudsman service does not accept cases that have already been presented in court. On the other hand, a consumer can still go to court if he has approached the ombudsman before and finds its decision unsatisfactory.
When Should The Financial Ombudsman Service Be Approached?
The official ombudsman service can be approached any time after the problem develops and the only situation where it cannot be approached is if the court has already been involved. If the consumer approaches the ombudsman before taking his problem to the offending business then the ombudsman directs the business to take the problem into account and resolve it independently. The reason for this is that, as per the rules, the ombudsman can only step in to deal with a complaint if the offending financial entity has been given eight weeks to respond to the complaint. If the consumer only approaches the ombudsman after he has contacted the financial entity and not received a satisfactory resolution over eight weeks, then the ombudsman process swings into action.
How Much Time Does It Take For A Complaint To Be Resolved?
There is no time limit placed on the financial ombudsman service to resolve a complaint. This allows the ombudsman to treat each situation independently on its own merits. Typically, the time taken to resolve a complaint depends on two things. The first is the complexity of the case and the second is the time taken by the ombudsman to procure all the information pertinent to the case.
There is another way through which time plays a key role when it comes to going to the ombudsman. A complainant is required to approach the ombudsman within six months of the completion of eight weeks that he gave to the financial organisation to resolve his problem. In addition to this, some other time based variables can also come into play depending upon the case. For instance, in the case of Payment Protection Insurance products, the time taken to resolve the complaint can be very long.
What Happens After A Decision Has Been Given By The Ombudsman?
As mentioned above, if a consumer accepts the judgement given by the financial ombudsman service then the decision is binding on both parties and the terms of the agreement have to be honoured by them. However, the consumer does have the option of ignoring the judgement given by the ombudsman service and choose to go to courts as well. This would mean that the judgement given by the financial ombudsman would become redundant. Still, in the majority of cases, the financial ombudsman is able to resolve problems between the parties involved without the case being taken to the court. What this means is that the financial ombudsman service is designed to be a step between resolving a complaint directly and amiably with the financial organisation and aggressively attacking the financial organisation in court. Effectively, it makes this service neutral in nature and trusted by all parties.