Financial ombudsman proposes publication of decisions

At present, the FOS is under no obligation to publish its rulings, although its website provides anonymised case summaries and technical notes to explain its approach to certain issues, such as complaints about payment protection insurance. On occasion it will make a decision available in full, such as the March 2011 decision on volcanic ash and travel insurance.

As part of its financial regulation reforms, however, the Government wants the service to be more transparent about its work.

Proposed amendments to the Financial Services and Markets Act include a provision requiring the ombudsman to publish "reports of determinations", after removing the name of the consumer behind a complaint and any particulars that might help identify them. Under the proposals, the FOS would retain a discretion not to publish a decision if it deemed it inappropriate.

The FOS has set out in a consultation paper (28-page / 206KB PDF)  what its preferred approach to meeting these requirements would be.

Only final decisions would be published, not the informal opinions of adjudicators in the earlier stages of a dispute, unless there are exceptional circumstances. Decisions would appear in full, not in summary form, on the FOS website shortly after they are made, it said.  

As indicated in the draft legislation the FOS would have the power not to publish a particular decision or parts of it if, for instance, full publication might assist criminal activity or interfere with an investigation, although it expects this to be a rare occurrence.

The FOS said that it supports the Government's stand on protecting consumers' identities. From a survey of past decisions, it believes that in most cases this would be achieved by redacting or disguising the consumer's name. In a few others, some details may also need to be changed to avoid disclosure.

"Careful drafting of the decision – being mindful of the need to protect consumer information – would therefore be possible, without losing the clarity or effectiveness of the decision itself either for the parties involved or for third-party readers, " the paper said.

In very rare cases, however, it might not be possible to publish a comprehensible account without revealing the consumer's identity. "However, our review suggests that this type of case is not a common part of our caseload. When we see cases like this, the best approach will be not to publish the case at all," it said.

The Government's draft legislation does not specify whether or not financial firms should enjoy the same anonymity as consumers. The FOS said that it believes they should not.

"Our initial view is that we should not delete the name of the financial business involved – nor seek to avoid publication of information that would identify the business (and/or brand) involved," the paper states.

"In many cases, the identity of the financial business is central to the issue in question, and its identity is often clear from the substance of the decision itself. For example, product names, policy wordings and business practices often form a core part of an ombudsman’s considerations, which might all point to a specific business.

"So if the objective was to protect the identity of the financial business in the same way as we propose to protect the identity of consumers, there would need to be extensive redaction of the decision – often effectively making the decision incomprehensible on publication," it said.

"There is inevitably considerable public interest in the identity of the business in many cases. Even if redaction was practical, it is unlikely to be generally sustainable," it said. "And attempting to do so may only fuel public speculation – and sometimes erroneous reporting. This can damage a wide range of financial businesses as well as or even instead of the actual business concerned."

The proposals would allow genuinely confidential information to be withheld, but firms would have to persuade the ombudsman that this was necessary.

Only about 11% of cases currently go all the way to determination by the ombudsman. Most are resolved earlier in the process. The FOS estimates that publication of final decisions will cost about £600,000 in the first year and £200,000 a year after that.

The consultation remains open until 9 December 2011. The FOS will publish a summary of responses later in the financial year. In the meantime, it will be carrying out further research with consumers and businesses to assess the likely impact of the proposals.