New bill will downgrade the role of the Financial Ombudsman Service | Letter

Key points

• Press reports on the king’s speech, including in the Guardian (The king’s speech: what is the government’s legislative agenda for the next 12 months?, 13 May), gave little coverage to the proposed enhancing financial services bill, a central part of which will downgrade the role of the Financial Ombudsman Service (FOS).
• Cloaked in the guise of “modernisation”, the proposals reflect pure interest-group lobbying by the finance industry, which already exercises substantial influence on policy.
• Given that the costs of consumer redress may be concentrated in a few large firms, they have a strong incentive to participate in the policy process.
• In contrast, consumers of financial products have diffuse concerns and more limited expertise, and face high organisational costs.
• One might expect, therefore, that independent empirical and social science evidence would play a key role for the government in assessing reform proposals.