Caroline Wayman, chief ombudsman and chief executive of the FOS, explained the position in a recent letter to Nicky Morgan, the chair of the prominent Treasury Select Committee in the UK parliament.
Under the Equality Act 2010, it is unlawful to discriminate, harass or victimise people on the grounds of a protected characteristic under the Act. Those characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation.
Organisations are obliged to anticipate and put in place reasonable adjustments to avoid people with disabilities being put at a disadvantage. What is 'reasonable' will vary from case to case depending on the individual circumstances.
Morgan wrote to Wayman earlier this month seeking clarity, among other things, on the FOS' powers to require financial services firms to "make reasonable adjustments for customers" who have disabilities.
In response, Wayman confirmed that the FOS does not have the power to determine definitively whether firms have breached their obligations under the UK's Equality Act when it finds their treatment of consumers has not been fair and reasonable, but that it can intervene in cases relevant to the Act.
The FOS is an independent body which deals with complaints by the customers of financial services companies which cannot be resolved through that company's own procedures. Its powers, which include scope to make monetary, interest and direction awards, are set out under the Financial Services and Markets Act 2000.
Wayman said: "When deciding what is fair and reasonable in all the circumstances of a complaint, the ombudsman takes into account the relevant law, regulators' rules and guidance, industry codes of practice and what they consider to be good industry practice. Where it is relevant to the circumstances of a complaint, the Equality Act will be considered when deciding what is fair and reasonable."
"This is not the same as making a formal judgment on whether or not a business has breached the Equality Act in the way that a court would. In accordance with the legislation and rules, the ombudsman would be making a decision on what is fair and reasonable in all the circumstances of a complaint. It is not for the ombudsman to make a formal finding that the Act is engaged or has been breached - findings on matters of law are reserved for the courts," Wayman said.
"If the ombudsman decides that the treatment of the consumer has not been fair, then the legislation gives the ombudsman service the power to make an award against the business for what the ombudsman considers fair compensation, including for financial losses and distress and inconvenience. And the ombudsman also has the power to make a direction requiring the business to take such steps in relation to the complaint as the ombudsman considers just and appropriate. In cases where it is relevant, this can include directing a business to make reasonable adjustments for a consumer," she said.
In her letter, Wayman gave examples of cases where it has used its powers to require firms to make reasonable adjustments.
Expert in employment law Jon Fisher of Pinsent Masons, the law firm behind Out-Law.com, said: "Of the duties under the Equality Act, the duty to make reasonable adjustments for people with disabilities is the most complex and the most difficult to comply with."
"Most of the duties involve not treating people less favourably because they have certain characteristics. However, the duty to make reasonable adjustments puts an obligation on firms to take positive steps to ensure that people are not disadvantaged. It involves an assessment of the disadvantage faced by an individual in the light of their particular condition, and then an assessment of how far it is reasonable for the firm to go to try to remove that disadvantage. Given the resources of most financial services firms, a lot is expected of them," he said.
"As firms rely ever more on technology to interface with their customers, they will need to ensure that their solutions are designed with people with disabilities in mind and that their services are accessible to all," Fisher said.
Contentious regulatory financial services expert Jonathan Cavill of Pinsent Masons said: "When firms consider complaints that relate to a customer’s disability or another protected characteristic they need to take particular care to ensure that they have considered their obligations under the Equality Act. When the FOS refers to the requirements in the Act, previous decisions show that it will take a broad approach in determining what reasonable adjustments the firm should have made and these can be onerous on firms."
"Firms should also take steps to monitor whether they receive material numbers of complaints from disabled customers about similar issues. The Financial Conduct Authority expects them to learn from previous complaints to ensure that they structure their business and communications in a way which takes reasonable consideration of customers with protected characteristics," he said.