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FOS Allowing Computers to Decide PPI Complaint Outcomes

With the Payment Protection Insurance (PPI) claim deadline set for August 2019, more people than ever are attempting to claim compensation for the mis-sold product. However, it seems that the Ombudsman - who is supposed to be there to support claimants reach fair outcomes - is finding itself in more and more controversy.

When a claimant and lender cannot agree on compensation, the claimant has the option to take their complaint to the Financial Ombudsman Service (FOS), whose purpose is to fairly resolve the issue. During 2015 the Ombudsman upheld complaints in favour of the claimant in seven out of ten cases, however, this past year it has upheld a mere three from ten.

FOS has attracted a lot of media attention over the past month; firstly, as it was accused of having untrained staff making decisions on complaints, and now, it stands accused of allowing computers to decide whether a complaint should be upheld or rejected.

It has been revealed that computer software is being used by the Ombudsman as a means of generating a ‘suggested outcome.’ Though staff at FOS are able to make their own decisions and disagree with the software, they ‘almost always’ go with the outcome suggested.

Documents which have been seen show how heavily the Ombudsman relies on computers; even letters sent to PPI claimants are phrased by them.

Statistics have shown that during the last 6 months of 2017, 1.55 million people (equal to one every four seconds) opened a claim with their bank to reclaim PPI payments. This was a major 40% increase on the same period of 2016 and has expectedly put added pressure on the Ombudsman, as more disputes are being sent to them.

Marc Gander, from the Consumer Action Group stated that the actions carried out by FOS are a “breach of trust.”

He added, “People who appeal to the Ombudsman believe their case is being considered by a human, but this suggests that the Ombudsman are applying little judgement before throwing out cases. People who have been refused compensation should write to the Ombudsman and ask whether the decision was made by a computer and if so demand it is reconsidered by a human.”

In February this year, decision-making processes were ‘laid bare’ during an employment tribunal case. Documents from this tribunal name the software used as Navigator, and Manager at the Ombudsman, Richard Whinder, says in them that an adjudicator working for FOS would gather documents from a complainant as well as the bank/credit company and then enter these in to Navigator.

Mr Whinder confirmed that he had not yet seen a case where the decision of the software had been disagreed with by an adjudicator. He added that he could only “assume” the software to be “an accurate system.”

So far, the mis-selling scandal has cost the banks £30 billion, and, with the deadline announced last year, more people are yet to claim.
Only last month a Channel 4 Documentary, Dispatches, showed employees admitting that they made decisions on complaints without carrying out proper investigations as they were “under pressure” from high targets. Some employees claimed that they often rejected complaints because this was quicker than challenging the banks.

Though in some cases the Ombudsman has agreed that the bank in question did not fairly sell the product to the customer, they have allowed the bank to avoid paying compensation. This has been when the Ombudsman has decided that PPI would have been taken anyway by the customer.

A spokesperson on behalf of FOS said, “Firms have learned from our feedback and decisions, which means more people now get the right answer and fair compensation directly from a business. Where that doesn’t happen, we look at the facts of each individual case before giving an answer – and the sophisticated support tools we’ve developed help us to do that consistently and fairly.”

The Ombudsman did state that the Navigator software was used more by Junior adjudicators, not in situations where the customer challenged the decision given by the Ombudsman.


Lythe, Ruth. ‘The Computers Deciding if PPI Victims Get A Pay Out: Explosive Documents Show They Even Write Rejection Letters.’ Mail Online. http://www.dailymail.co.uk/money/markets/article-5653351/Computers-decide-PPI-victims-payout-explosive-documents-show.html