Published as a Financial Ombudsman Service (FOS) Insights blog, Simon Rawle, Ombudsman Leader, has outlined the new Duty from the FOS’ perspective and explains how the FOS is working with the FCA and other stakeholders in relation to the implementation of the Consumer Duty rules.
The FOS’ approach will mirror the intent of the regulation in that it will not apply to past business – the Duty does not have a retrospective effect and will not apply to past actions by firms. The FCA and the Financial Ombudsman agree that firms’ conduct should be judged against the rules and standards that were in place at the time.
The FOS’ work often involves assessing complaints against the standards at the time of the event complained about; it does not apply today’s standards to yesterday’s events. Its work and decisions always involve the assessment of what it believes is fair and reasonable in the circumstances of each individual case, considering what happened against the law, rules, codes, and good practice that applied at the time.
To address stakeholder concerns that outcomes-based regulation may lead to inconsistent interpretation of the new Duty by the FCA and the FOS. In response, the FOS is working closely with the regulator, in particular through the Wider Implications Framework, to ensure a consistent and complementary approach to the application of the new Consumer Duty. During the implementation period, FOS and the FCA will be sharing feedback and working to align their approaches, and the FOS will share with the FCA any issues it identifies through its casework.
The FOS has engaged directly with businesses, trade bodies (including the ABI), and other stakeholders to hear views and concerns regarding the introduction of the Duty.