FOS criticised over fraud claims

Ramesh Sharma

April 8, 2006

Alan Lakey, senior partner at Highclere Financial Services, said FOS had admitted to him that they would not report people found to have committed fraud. He said: “When the FOS believes that a fraud is being practised, it refuses to report the culprit to the National Criminal Intelligence Service or other official body. Fraudsters are politely rebuffed and advised to pursue complaints via the court system.

“I am now in possession of a response from the FOS legal department, which confirms that where, at some later date, evidence is produced confirming fraud, they are unlikely to re-open a file. It suggests a firm should pursue the matter through the courts.

“It is no surprise that firms are increasingly concerned at the imbalance within the FOS procedures. The current system is unfair, plain and simple.”

Responding to the allegations, David Cresswell, head of communications at the FOS, said: “The Ombudsman service pursues fewer than one-in-six complaints that consumers raise with us. The majority of the complaints that we filter out involve simple misunderstandings, unrealistic expectations, and breakdowns in communication between firms and their customers.

“At this preliminary stage we also filter out complaints that clearly have no merit, well before they become full-blown ‘chargeable cases’. But just because someone doesn’t have their complaint pursued (or upheld) by the Ombudsman isn’t proof they were committing fraud. Fraud is a criminal offence and the Ombudsman was not set up to investigate or prosecute criminal matters. If a firm has evidence that any party has committed a criminal offence against it, it is the firm’s responsibility to pursue the matter with the authorities. I don’t believe his views are broadly representative of the industry.”

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