Latest news with #financialombudsman
The Sun
6 days ago
- Business
- The Sun
Huge change to compensation rules plotted by financial ombudsman after spike in complaints
A HUGE change to compensation rules is being plotted by the financial ombudsman after a spike in complaints. The Financial Ombudsman Service (FOS) is proposing to change the interest rate applied to the compensation awarded to consumers, to tie it to the Bank of England base rate. 1 If someone is found to have lost out because of their financial firm's errors, the ombudsman can order the business to pay compensation, plus interest. There are different types of interest businesses can be directed to pay, and one of these compensates consumers for being 'deprived' of money (not having it available to use) such as when it finds a claim has been wrongly turned down by a financial firm. The ombudsman can currently direct businesses to pay 8% interest on top of the compensation for the period their customer was out of pocket. It can also tell a business to pay 8% interest if it does not pay compensation on time. But the service said feedback suggests the interest rate 'could be better aligned with, and reflect, market conditions'. For new complaints submitted to the service, it is recommending changing the interest rate so it tracks against the Bank of England's average base rate plus one percentage point. The base rate would be calculated as an average rate over the period that the money was due until the date redress payment is made. The consultation is gathering feedback on this recommendation as well as other potential options and proposals for implementation. The Bank of England base rate currently sits at 4.25%, its lowest level in two years. Economists have speculated that two more reductions could happen this year. James Dipple-Johnstone, interim chief ombudsman at the FOS, said the service welcomes feedback 'on whether our proposed new interest rate strikes the right balance between simplicity, fairness and proportionality". The consultation will run until July 2 and the service said further proposals around its service will be brought forward in the summer.
Telegraph
28-05-2025
- Business
- Telegraph
NS&I paid out £4k to wrong person
National Savings and Investments (NS&I) mistakenly paid out £4,300 to a grieving man after mixing up two accounts with the same name and birthday. The recipient, known only as Mr S, was sent the cash after the death of a loved one, only for NS&I to realise it belonged to someone else and demand it back. He was offered £350 in redress, but complained to the Financial Ombudsman Service after it caused him a 'significant amount of stress at a difficult time'. The situation began after a woman, known as Ms S, passed away. As her sole beneficiary and the co-executor of her estate, Mr S discovered she had a premium bonds certificate. He contacted NS&I with copies of her will and certificates showing her birth, marriage and death, requesting to transfer the money to his own premium bond account. When NS&I responded, it confirmed another £4,300 in bonds were held in her name and sent the funds in December 2023. The bank had not realised the money belonged to another Ms S with the same first name, surname and date of birth. After uncovering the error three months later, the bank demanded that the money be returned.
BBC News
20-05-2025
- Business
- BBC News
Mastercard users to receive £70 in compensation
Millions of Mastercard users could get up to £70 each after a court ruled that historic fees charged by the provider to be unfair. The decision comes after a long-running legal case going back a decade, brought forward by a former financial Merricks argued that shoppers were charged higher prices after fees were wrongly levied on transactions made over a 15-year period between 1992 and has been approached for comment. Mr Merricks said that, despite retailers paying the fees, shoppers had lost out as retailers passed on these costs in the form of higher former financial ombudsman launched his claim after the European Commission ruled in 2007 that Mastercard's "multilateral interchange fees" charged to businesses had infringed competition law since the year alleged that 46 million shoppers in Britain were overcharged. The fees were paid by retailers accepting Mastercard payments, rather than by consumers themselves.
