Ami has released a statement saying that it “strongly” opposes the FCA’s suggestion to increase the compensation limit of the Financial Ombudsman Scheme from £150,000 to £350,000.
The trade association says that, in proposing this significant increase, “the FCA has lost sight of both its own and FOS’s purpose.” It claims that the scheme was designed for cases that can be dealt with quickly using dispute resolution techniques, and argues that cases above these levels should be subject to legal decisions based on contract law.
The proposal is part of consultation paper CP18/31, which also details plans to extend FOS access to larger SMEs. On Monday, Ami was vocal in its concerns over this point, saying that it believed objections from the industry were not considered in the preceding consultation. The FCA rejected this claim “completely.”
Ami chief executive Robert Sinclair comments: “Accessing dispute resolution for such significant cases on a fair and reasonable basis rather than a proper legal dispute procedure through the courts is just inappropriate.
“Just because there are examples of higher claims being paid out does not warrant a radical increase to the FOS limit. Even most of the respondents who agreed to the extension of FOS eligibility to include larger SMEs did not support an increase to the limit, with only three suggesting that it should be that high. Relying purely on data analysis is not a sufficient justification. It was always considered that higher value disputes with complex arguments should be the subject of legal remedy rather than FOS.
“AMI will respond to the consultation accordingly and we encourage individual firms to do the same.”