In a recent FOI enquiry, the questioner asked why, every time he asked for an update on his complaint, the answer was that FOS was in high level discussions with American Express to discuss the way compensation was calculated.
FOS were unable to answer this in the 20 day time limit for FOI questions, nor in the 7 day extension they added, nor for 3 days after that, but eventually they remembered that FOS meets financial businesses, trade associations and other “stakeholders” regularly:
“Over the last three years we’ve had four meetings with American Express Europe Limited to understand the approach they typically take to fees, charges, the application of interest rates, and assumptions about payments when calculating compensation on PPI complaints”.
What comes from these meetings is uncertain.
I had to smile about the reference to interest rates…In my own (unrelated) case, FOS reference 5156222/KM/46, LLoyds mishandled the savings of my aged Aunt. I was almost ready to agree the compensation we had negotiated, but the question of interest rates held it up. The bank agreed that interest was due on money that they mishandled, which should have been in a safe place for the 86 year old lady, like a building society. They offered to pay interest at the bare bank rate, ignoring that a higher rate was available on any high street in any building society. I asked FOS to decide the matter. The adjudicator did not understand the issues and the Ombudsman (A very senior ombudsman with years of experience) thought bare bank rate was just fine. Furthermore, he did not tell me that FOS has rules and guidance about the rate of interest to be used in such instances, which he had disregarded. Following the FOS’s own guidelines would have raised my Aunt’s compensation by £4800.
Despite months of arguments with FOS and the Independent Assessor, FOS would not change their view and would not explain why the did not follow their own guidelines. It was a depressing experience which destroyed my faith in both the FOS and the Independent Assessor.
Perhaps FOS and its stakeholders would view things differently if my case was repeated today, after their discussions about interest rates.