In March, the FOS was the subject of an undercover investigation by Channel 4’s Dispatches programme, which found what it described as a severe lack of staff training and understanding of financial products.
It reported that current and former staff – including senior managers – told Dispatches there are big problems at the service, including a lack of training and, in the past, unachievable targets.
The programme claimed that staff were reaching decisions without first properly reading case files, meaning that hundreds of thousands of claims may need to be reviewed.
A member of the Treasury Select Committee, Rushanara Ali, told the programme: “They are accountable to parliament, they are accountable to the public and they’ll need to explain themselves.”
Take findings very seriously
On 22 February, the chief executive of the FOS, Caroline Wayman, wrote to Nicky Morgan, chair of the Treasury Committee, and John Mann, chair of the sub-committee, nearly three weeks before the programme aired on 12 March.
In the letter, Wayman, who is also chief ombudsman, stated that the programme’s findings would be taken “very seriously”.
In Morgan’s response, dated a day after the programme aired, she sought assurance that the FOS could evidence to parliament that the problems identified in the programme had not led to poor decision making.
She asked if it was the intention of the FOS “to hold an internal review into any or all of the issues raised in the programme?”.
In a lengthy response, addressing a number of questions Morgan had posed, Wayman confirmed that the FOS would conduct an independent review and keep the committee updated with its progress.
Demonstrably independent
Letters first published on Tuesday show that the push for an independent review has not slowed in pace.
On 28 March, Morgan emphasised that the committee “naturally expects that the reviewer chosen by the non-executives will be demonstrably independent”.
“Conflicts of interest, or perceptions thereof, will undermine public confidence in their work,” she wrote.
The committee chair also emphasised that the review should “not be restricted to the examination of those issues raised in the Channel 4 Dispatches programme”.
“In particular, the review should conclude whether any failings can be attributed to management action or inaction, cultural factors, staff objectives and performance management, organisational structure or any other underlying factors.”
In her response, Wayman and the FOS board agreed that “its review must be demonstrably independent” and that it was fundamental to its consideration and identification of a suitable candidate.
FOS under the microscope
The Dispatches investigation into the FOS was likely prompted by a grilling of Wayman and the FOS director of engagement, Annette Lovell, by the Treasury Sub-Committee on 15 January.
Wayman and Lovell were summoned to answer questions around employee satisfaction and complaints.
In his opening comments, sub-committee chair Mann started by “suggesting” that the FOS “is not a very happy ship at the moment”.
“It appears that staff are very unhappy, with lots of complaints.”
Wayman and Lovell answered a series of questions about the FOS’s employment structure, remuneration, case load, training and the deluge of payment protection insurance (PPI) claims that are bogging the organisation down.
