Financial Services Ombudsman - Essay Example

?Financial Services Ombudsman Insert Part One An Ombudsman scheme is a service that helps look into complaints lodge against anorganization. By using this scheme, an individual tries to resolve disputes without necessarily having to go to court. Ombudsmen are generally categorized into two: public sector Ombudsman and private sector Ombudsman. The public sector Ombudsman is charged with the responsibility of investigating complaints regarding government departments, local council and the NHS. Private sector Ombudsman on the other hand, investigates complaints associated with businesses such as insurance, banking, estate agents, or telecommunication providers. There are therefore, a number of Ombudsmen that exist in UK which includes, parliamentary and health services Ombudsman, financial Ombudsman, local government Ombudsman, European Ombudsman, legal Ombudsman, housing Ombudsman, prisons and prohibition Ombudsman, and property Ombudsman. Often than not before lodging a complaint with the Ombudsman, one has to make that complaint to the organization in the first place. In the event the Ombudsman reaches into a conclusion that the compliant by the individual is justified, they make recommendations on what the respondent organization should undertake to resolve the dispute. It should however be noted that the Ombudsman does not have the power to impose or force the organization to implement its recommendations even though more often than not, their recommendations are implemented. The main objective of an Ombudsman scheme is to investigate into cases of maladministration, and as such, the methods undertaken by an organization in an attempt to reach a decision or deal with a given situation. Instances of organization maladministration may include: delay in taking action or even total failure to take any action, giving misleading or wrong information, rudeness, failure of an organization to follow its own procedures or policies, and an organization treating some individual in an unfair manner compared to other individuals. It is the role of Ombudsman UK to institute investigations as well as settle complaints involving individual and organizations or even government bodies. Additionally, the Ombudsman encourages better practices in organizations when handling complaints. In instances such as those mentioned, the Ombudsman only investigates cases in which a person has suffered individual hardship, financial loss or injustice following the act or omission of the respondent organization. Usually the Ombudsman does not engage itself in investigating decision taken by an organizing for the sole reason that the complainant is not in agreement with it. It follows therefore that, for a person to successfully lodge a complaint with the Ombudsman scheme, the person must have given the concerned organization, a chance to comment on the lodged complaint as well as settle any problems. It is very unlikely that an Ombudsman will investigate a case which is in the verge of going to court or a case in which court proceedings have already commenced. Actually, many at times an Ombudsman does not engage into cases or complaints that could as well be tackled by a tribunal or a court. An Ombudsman has a time limit within which a complainant can approach it to lodge his or her complaint. This time limit is usually six to twelve months if a compliant exceed that time limit then the Ombudsman is not left with no option but to reject the compliant. It is pertinent to mention that Ombudsman do not offer advice, and therefore it is important to seek independent advice in order to make an informed decision before lodging a complaint with the Ombudsman. It is possible that there may be other alternatives, such as making an application to court or going to a tribunal. It is important ant to not the procedure through which a person may lodge a complaint to the Ombudsman. This is because the procedure used by the Ombudsman to initiate an investigation into a complaint is greatly dependent on which of the various Ombudsman the compliant is lodged. Even though every Ombudsman has its own timescales and procedure, they generally consider a given compliant only if such a compliant has passed through an internal procedure of complaints of the organization against which a compliant has been lodged against. In most cases, an application form for purposes of making the compliant is provided in the Ombudsman offices. This does not however mean that a person may not lodge a complaint without a form since a parson can as well avail them with specific information which include; the name and address of the individual lodging the compliant, the name and address of the respondent organization, details of what constitute the compliant, that is what the organization did or failed to do, one should also indicate what personal financial loss, hardship, or injustice was suffered, what the respondent organization should do to address the situation, the individual must also include the details of how the compliant has been handled before he decided to contact the Ombudsman, and finally the date in which the complainant first identified the incident that he is making a complaint about. Part Two In the case of Mr. and Mrs. Brown's the appropriate ombudsman that should be contacted is the financial ombudsman. The financial ombudsman scheme is a statutory, informal free service that helps in dispute resolution. These disputes may be between customers and businesses providing financial services based in UK such as insurance companies, financial advisers, financial companies, banks, among others. This ombudsman scheme service is established under the financial service and market Act 2000, but it is in depended from the Financial Service Authority. The scheme operates as a civil court alternative. The main objective of the scheme is to resolve disputes between financial institutions and small businesses or individual within the shortest time possible, and with minimal formalities biasing on what is reasonable and fair in each circumstances of the case. In an effort to arrive at what is reasonable and fair, there are several factors that the financial ombudsman scheme put into considerations. These factors include: the relevant law, regulators’ rules regulations, guidance and standards, good industrial practice at the time in question, and relevant code of practice for instance the code of banking. It is worth noting that the financial ombudsman scheme has three jurisdictions which cover almost all the business in the financial service: voluntary jurisdiction, compulsory jurisdiction, and consumer credit jurisdiction. Voluntary jurisdiction is one that applies to the financial businesses as well as activities which may not be embraced by both consumer credit jurisdiction and compulsory jurisdiction. This jurisdiction therefore covers the complaints from the consumer in relation to certain financial activities of the business, for instance national savings and investment. The second jurisdiction is the consumer credit jurisdiction. This jurisdiction is created by the Consumer Credit Act of 2006. It covers complaints related to consumer credit against any businesses. This businesses however must have standard licenses from the OFT which are not authorized by the Financial Service Authority. This is because where the licensee is authorized by the Financial Service Authority; the compulsory jurisdiction covers complaints regarding consumer credit. Compulsory jurisdiction applies to financial service businesses that are authorized by the Financial Service Authority (FSA). This jurisdiction also covers complaints associated with consumers’ credit against consumer credit activities; Financial Service Authority regulated activities, as well as other activities that are specified. The procedures for lodging a compliant with the financial ombudsman cannot commence before the complainant make his compliant known to the respondent organization. The good think about this case of Mr. and Mrs. Brown is that the complainant have already taken the first step of lodging the compliant with the respondent organization that is the travel insurance, from sun life holiday. Since the outcome of the compliant, our clients made to the travel insurance, from sun life holiday were not satisfactory they can proceed and lodge their compliant with the financial ombudsman service. Mr. and Mrs. Brown are within the time limit that an aggrieved person may make a complaint to a financial ombudsman which is six months from when an individual receives a decision from the respondent organization. Mr. and Mrs. Brown should include the following information: their name and address as the individuals lodging the compliant, the name and address of the respondent organization, details of what constitute the compliant, that is the organization refusal to pay the considerable medical expenses incurred, they should also indicate what personal financial loss, hardship, or injustice was suffered, what the respondent organization should do to address the situation, they must also include the organization refusal to cover the medical expenses claiming that Mr. Brown illness was as a result of pre existing condition thus their decided to contact the Ombudsman, and finally the date in which the complainant first identified the incident that he is making a complaint about. Part Three There is a great possibility that the claim by Mrs. Brown to be paid considerable medical expenses incurred during the trip can succeed. This is because the Financial Service Authority is charged with the statutory oversight of financial ombudsman scheme. The statutory oversight of FSA includes appointing directors and chairmanning. The Financial Ombudsman Service is however independence in its operations. The independence enjoyed by the Financial Ombudsman Service enables it to capture a wider jurisdiction that embraces financial service businesses that are not regulated by the Financial Ombudsman Service. In the event that the decisions taken by Financial Ombudsman Service is accepted by the complainant, the respondent businesses are bound by the decision taken and the Financial Ombudsman Service can make awards to Mrs. Brown that does not exceed 100,000 pounds. This service is provided free of charge to consumers. Ironically, financial institutions in the UK founded the Financial Ombudsman Service which financial institutions it administers complaints against. That notwithstanding, Financial Ombudsman Service administer complaints provided the process of complaints in the financial institution is adhered to. Financial service and market Act of 2000 empowers the Financial Service Authority to maintain market confidence across the financial system in UK, protection of consumers, reduce financial crimes and alleviating public knowledge regarding financial system. It is therefore possible that Mrs. Brown may be awarded considerable medical expenses incurred. It is pertinent to mention that the Financial Service Authority is responsible for overseeing supervision and authorization of all financial institutions but within the scope of the financial service and market Act 2000. It there follows that the Financial Ombudsman Service is indeed the conduit of public to this function. The businesses that fall under the scope of Financial Service Authority include but not limited to: insurance companies, banks, investment firms, friendly societies, and credit unions. There are several remedies that the financial ombudsman may order or recommend. These remedies include: an apology, out of pocket expenses, compensation or even a change in practice. The financial ombudsman is very likely to award or recommend that Mrs. Brown be compensated within a given limit. The advantage of this recommendation is that the compensation awarded by the ombudsman is significantly lower than what the court would order the compensation amount if the matter were to proceed to court. The ombudsman can also ask the organization to review the complaints lodged against such an organization. Part Four There has been proposal for reform of travel insurance policies to the government most especially in the (ATOL) Air Travel organizers’ licensing insurance scheme. These proposed reforms were outlined in February by the transport department. The implementation of these proposed reforms would provide individuals who book holidays with more extensive as well as clearer extensive scheme of protection. These reforms are also important as they are geared towards discouraging organizations from potentially misleading their customers on the level of protection provided by a given policy only to realize later that such kind of protection is nonexistent. The issuance of a wide variety of documents by the majority of travel insurances need to be replaced with standardized documents issued to the travelers, and documents these documents should make a clear outline of the kind of protection a travel agent shall provide in the event of any occurrence during the trip. The standardization of documents which are currently being issued by most firms will in return increase the awareness of consumers regarding protected trips and the package offered. Additionally, as proposed by the UK Civil Aviation Authority that the Air Travel organizers’ licensing (ATOL) should be made a supervisory body to protect individuals who have bought holiday package and flights from any of the tour operator member. Since most of the UK tour operators need an Air Travel organizers license to operate, making this organization an overall body would alleviate the protection of consumers from any deceitful tour operators. The Air Travel organizers’ licensing under the UK Civil Aviation Authority will be charged with the responsibility of inspecting licensed tour operators who should as a requirement obtain insurance bonds directly for UK Civil Aviation Authority for purposes of uniformity and standardization. The foregoing reform will enable the affected travelers to claim for a refund following any event that would cause the airline not to provide the travel expectations of the customers. Additionally, the airline is able to provide alternative flights, accommodation, as well as other items that are included in the holiday package. The introduction of the concept of flight plus has been proposed by the department of transport so that the air holidays which are not currently covered by the Air Travel organizers’ licensing can be financially protected. Within their proposal, the department of transport included a suggestion that all the bookings that are done under the Air Travel organizers’ licensing holidays protection should be availed with an Air Travel organizers’ licensing certificate that is standard during purchase time for purposes of knowing their rights as well as what is protected. Bibliography J. Elder, Fair play and foul?: a book of revelations about patients' rights, complaints handling and compensation in the United Kingdom and elsewhere in Europe. (Second edition John Elder, London 2005) Read More