IoM Consults On Ombudsman Scheme Changes

by Jason Gorringe, Tax-News.com, London

14 February 2012

The Isle of Man's Office of Fair Trading is proposing to increase the maximum award limit under the Isle of Man Financial Services Ombudsman Scheme from GBP100,000 to GBP150,000.

If adopted, the new limit would apply where an act or omission which gives rise to a complaint occurs on or after April 1, 2012.

The Financial Services Ombudsman Scheme is a free, independent dispute resolution service for customers with a complaint against a financial service provider operating in or from the Isle of Man. It became fully operational in January 2002 and is now established under Schedule 4 of the Financial Services Act 2008.

Those in receipt of financial services can bring a complaint if, in the course of receiving financial services, the firm involved caused losses (including material distress or inconvenience) through maladministration or negligence. For the purposes of the scheme, financial services include insurance, investments, banking, mortgages and credit as well as pension and other financial advice. The Pensions Ombudsman covers complaints about the administration and running of personal and occupational pension schemes.

The current maximum award limit of GBP100,000 has remained unchanged since the Scheme was established in 2002. This limit has decreased in real terms as increasing the amount in line with inflation since January 2002 would see it set at approximately GBP146,000.

The UK’s Financial Ombudsman Service increased its maximum award limit to £150,000 on 1st January 2012. In addition, the proposed financial ombudsman for Jersey and Guernsey is also expected to adopt this figure.

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