Ombudsman service is handling more than 60,000 motor finance commission cases
The number of cases represents ‘quite a significant block of work’ MPs on the Treasury Committee were told.
The Financial Ombudsman Service (FOS) has more than 60,000 complaints cases relating to motor finance commission pending, a committee of MPs has heard.
James Dipple-Johnstone, interim chief ombudsman at the FOS, was answering questions from the Treasury Committee about the scale of complaints and whether they compared with the PPI (payment protection insurance) scandal.
He told MPs: “We’ve got over 60,000 cases with us relating to motor finance commission.
“So it is quite a significant block of work, which is why we’ve put a team onto it, not just to leave it there until the courts decide what they’re going to decide, but to start to prepare it so we can move it through quickly.
“Because we’ll have to be dealing with that next year and the year after.”
The Supreme Court is due to decide whether to uphold a landmark ruling over the mis-selling of car loans, which could leave UK lenders footing a mammoth compensation bill.
Asked how motor finance complaints compare with the scale of PPI, Mr Dipple-Johnstone said: “Obviously the service saw a lot more during PPI but there was a wider selling of that kind of product.”
He said colleagues had said of the PPI scandal: “It was a slow burn, then it increased quite dramatically, and then the service cleared the work through.
“So what we’ve tried to do is learn from that event, prepare our ground, make sure we’ve got the training in place, we can scale up our resources quickly, we understand the product, we’ve got the legal advice, we’ve got the digital platforms to deal with the cases, so that if they do come through to us, we’re able to scale up quickly, so we can provide the best service we can to customers.”
Mr Dipple-Johnstone also said the FOS is looking at how artificial intelligence (AI) and automation can help with its service, saying tools are being used to “automatically get the right case to the right person with a high degree of accuracy within a few minutes of that person requesting it”.
He said the service is looking at whether AI can help to digest and summarise documents.
Mr Dipple-Johnstone also emphasised to the committee: “We’re not deciding the cases using AI, we’re using them as tools to help us process the cases more effectively.”
Committee members also asked multiple questions about the departure of Abby Thomas, who joined the FOS in October 2022. Ms Thomas’s departure as chief executive and chief ombudsman at the FOS was announced on Thursday last week.
FOS chairwoman Baroness Manzoor told the committee several times during the hearing that the departure was a mutual agreement, adding: “We wish her well for the future.”
On Monday, the FOS said Baroness Manzoor will be stepping down after serving two terms of office, when her current term expires on August 1.
Asked by the Treasury Committee on Tuesday if the FOS is a rudderless organisation, she told the MPs: “I’m there until August 1… it’s certainly not rudderless.”
She added: “I have a very experienced board.”
Baroness Manzoor was also asked by MPs whether any severance payment has been made to Ms Thomas.
She told the committee: “Abby Thomas has stepped down and anything else to do with accounts will appear in (the) accounts.”
Asked if she could write to the committee on this particular matter, she said: “If I’m able to write in those terms I will certainly do so.”
