Unpaid FOS Determinations
An issue that always undermined the FOS was unpaid determinations. This was a particular issue with respect to financial planning disputes. Nearly 1 in 5 of the Determinations issued with respect to financial planning firms were not paid. Determinations were not paid because the firm went into liquidation or it didn’t have insurance coverage. Some firms operated without any PI insurance at all, others had PI insurance that was so limited by exclusions that it was effectively useless. Some firms had such high deductible with respect to their insurance coverage that they effectively had no insurance at all.
In this context, the Government has announced (as part of its response to the Financial Services Royal Commission) that it will pay all of these unpaid Determinations. This is a very welcome development which will go some way to developing trust in the financial services regulatory system.