Member

The FCA rules require the ombudsman to take into account relevant law, regulators’ rules and guidance, codes of practice and good industry practice at the time, but none of these is determinative on its own. FOS can currently find that if a firm acted within the strict letter of its contract, or the relevant regulations or guidance, it can still rule and say, on behalf of the consumer, a consumer who is in a much weaker position, both financially and in terms of knowledge, than the provider that is being questioned, that overall, it was not fair and reasonable. All the guidance might have been followed, all the rules might have been followed, but still it may seem to the ombudsman that it was not fair and reasonable. That is the point of the ombudsman. Unless I am mistaken, in which case I will be happy to hear an explanation from my noble friend the Minister, that is the problem. It is taking away that ultimate discretion for the ombudsman to decide, in all the circumstances, that it is not fair and reasonable. Is this an asymmetry of knowledge and power?