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Spend & Save

New rights of appeal debated

The National Consumer Council (NCC) has waded into the row over whether there should be a right of appeal against the decisions of the Financial Ombudsman Service (FOS).

Jill Johnstone, NCC's director of policy, said: "Industry pressure to allow companies to appeal against decisions given in favour of consumers must be vigorously resisted." NCC has lodged its opinion as part of its response to the formal review of the Financial Services and Markets Act, which governs FOS as well as the Financial Services Authority. Financial services companies have lobbied for a right of appeal as they believe some FOS decisions have effectively laid down new regulations without debate.

The consumer body argues that to allow appeals would shake consumer confidence in FOS and weaken consumer protection. "There has to be some authority to make a final decision on disputed cases, and the ombudsman - who is independent and accountable through Parliament - is the proper authority to do so. Ombudsman schemes provide speedy and free access to redress for people when things go wrong. And in the case of financial products and services the existence of an ombudsman also gives important protection against firms exploiting gaps in customer knowledge," she said.

Introducing a right of appeal for financial disputes would make using the complaints process longer, more expensive and stressful argues NCC.

Ms Johnstone said: "As it is, for the sorts of cases likely to go to appeal, the consumer would have already been through a protracted multi-staged process. It would also set a dangerous precedent, with possible knock-on effects across other UK private sector ombudsman schemes, where decisions are also binding on firms with no right of appeal."

NCC claims that one in every five consumer problems with a legal remedy is not pursued, because of concerns about the time and hassle involved.