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Source: http://www.financial-ombudsman.org.u.../ar09/ar09.pdf
These proposals are under consideration in government in the UK (both north and south of the border) and in Europe. The idea would be to allow a collective claim to be made on behalf of all those people who are adversely affected – without the need for them to register individually. This is seen as a more effective method of determining collective issues – and of generating redress, where appropriate. While this may not be a universal – or even an appropriate – remedy for all instances of widespread detriment, it does focus onthe core of the bigger problem, rather than on the detail of individual cases. There are other possible redress mechanisms that could be considered. But what is clear is that the present system for dealing with large areas of un-remedied consumer detriment is in need of reform.
I would sum up the objectives of any reform in the following way. It should:
■ Lead to the fair and timely resolution of a widespread issue.
■ Resolve the issue generically for all affected consumers – not just for those who have the initiative to make a complaint to a business (and the persistence to
then take their dispute all the way to the ombudsman, if necessary).
■ Draw a line under the liability of fi nancial businesses, so they know once and for all what amount (if any) they need to budget for.
■ Avoid offering easy opportunities to claims-management companies to take
disproportionately large slices of redress belonging to consumers.
■ Involve a process which is transparent and open to reasoned input – from both
the fi nancial services industry and consumers.
■ Provide incentives for consumers to accept fair redress, rather than pursuing
individual claims in court.
■ Lead to solutions that provide suffi cient economic drivers to deter future
behaviour that could be detrimental to consumers.
To meet these objectives, policy-makers will need to be imaginative. They will need
help from consumer organisations, and positive and fair-minded input from the
fi nancial services industry. There are signs that the coming year may see energies
focused on the issue.
A solution to the problem would reduce the volatility of the ombudsman
These proposals are under consideration in government in the UK (both north and south of the border) and in Europe. The idea would be to allow a collective claim to be made on behalf of all those people who are adversely affected – without the need for them to register individually. This is seen as a more effective method of determining collective issues – and of generating redress, where appropriate. While this may not be a universal – or even an appropriate – remedy for all instances of widespread detriment, it does focus onthe core of the bigger problem, rather than on the detail of individual cases. There are other possible redress mechanisms that could be considered. But what is clear is that the present system for dealing with large areas of un-remedied consumer detriment is in need of reform.
I would sum up the objectives of any reform in the following way. It should:
■ Lead to the fair and timely resolution of a widespread issue.
■ Resolve the issue generically for all affected consumers – not just for those who have the initiative to make a complaint to a business (and the persistence to
then take their dispute all the way to the ombudsman, if necessary).
■ Draw a line under the liability of fi nancial businesses, so they know once and for all what amount (if any) they need to budget for.
■ Avoid offering easy opportunities to claims-management companies to take
disproportionately large slices of redress belonging to consumers.
■ Involve a process which is transparent and open to reasoned input – from both
the fi nancial services industry and consumers.
■ Provide incentives for consumers to accept fair redress, rather than pursuing
individual claims in court.
■ Lead to solutions that provide suffi cient economic drivers to deter future
behaviour that could be detrimental to consumers.
To meet these objectives, policy-makers will need to be imaginative. They will need
help from consumer organisations, and positive and fair-minded input from the
fi nancial services industry. There are signs that the coming year may see energies
focused on the issue.
A solution to the problem would reduce the volatility of the ombudsman
