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The pinnacle of the UK’s Monetary Ombudsman Service stop unexpectedly on Thursday in the course of a serious assessment of the patron redress system within the monetary companies sector.
The departure of Abby Thomas, who has run the ombudsman since October 2022, comes as the federal government steps up strain on all of Britain’s major regulators to ease the burden of guidelines on companies in an effort to spice up a flagging financial system.
Thomas was beneath strain to take a much less consumer-friendly strategy, in accordance with one particular person aware of the matter, who mentioned the ombudsman’s board was pissed off at her preliminary reluctance to start out charging claims-management firms for bringing instances.
The particular person additionally identified that the board was “lower than fulsome in its reward” of Thomas, after its chair Baroness Zahida Manzoor mentioned in a press release: “On behalf of the board and the chief, I wish to file our thanks and want Abby each success in her future profession.”
The ombudsman has attracted criticism from the Metropolis of London for awarding compensation to prospects who say they’ve been mistreated by monetary companies teams, which business executives says deters overseas traders from the sector.
Financial institution executives declare the UK’s “compensation tradition” is among the major components deterring traders and weighing on monetary companies firms.
“Abby and the ombudsman have been beneath fireplace in latest months,” mentioned James Daley, head of shopper group Fairer Finance.
“It could be that she is quitting in protest on the route of journey. If that’s the case, that’s extremely worrying and maybe the strongest sign but that the Treasury is critical about watering down shopper protections.”
Thomas and the FOS had been approached for remark.
Thomas has been changed on an interim foundation by her deputy James Dipple-Johnstone taking up the chief ombudsman function, with chief finance and danger officer Jenny Simmonds changing into chief government.
Chancellor Rachel Reeves final yr referred to as on the FOS and the Monetary Conduct Authority to enhance how they dealt with “historic market apply and mass redress occasions” amid fears that banks might need to pay billions of kilos in redress over motor finance mis-selling allegations.
The outgoing chief government had been attributable to seem earlier than parliament’s Treasury choose committee subsequent Tuesday at a listening to on the motor finance disaster. However MPs mentioned on Thursday they’d as a substitute query Dipple-Johnstone in addition to Manzoor.
The committee mentioned MPs “might select to discover the circumstances” of her exit, in addition to analyzing “to what extent the continuing authorized proceedings associated to the motor financing sector and commissions has impacted the FOS”.
The FOS and FCA outlined potential modifications to the monetary redress system in November, together with giving firms longer to reply to buyer complaints and lowering the scope to enchantment in opposition to ombudsman choices. A session closed final Friday, with proposals anticipated within the first half of this yr.
UK Finance, the primary commerce physique for banks, mentioned in its response that “it’s clear this a part of the regulatory system just isn’t functioning as effectively because it may, creating important uncertainty within the framework and due to this fact performing as a drag on the investor enchantment for UK monetary companies”.
The Financing and Leasing Affiliation mentioned in its response that “corporations complying with FCA guidelines can nonetheless discover themselves embroiled in mass redress occasions”, including this brought about “regulatory uncertainty”, launched further danger for market operators and harmed financial progress.
