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The CEO and Chief Ombudsman of the Financial Ombudsman Service (FOS), Abby Thomas, has announced her resignation. Her stepping down comes amid internal disputes and escalating challenges related to the motor finance scandal. The FOS has faced increasing scrutiny over its handling of motor finance complaints and its approach to claims management companies.
The motor finance scandal focuses on allegations of mis-sold car finance agreements, particularly concerning Discretionary Fee Arrangements that may have led consumers into unsuitable and unaffordable finance agreements. The FOS experienced a significant surge in complaints in 2024, largely related to this issue.
Thomas’s resignation is reportedly linked to disagreements with the FOS board over the implementation of fees for claims management companies (CMCs). The board recently decided to impose a £250 fee on CMCs for each case referred beyond the first 10 per year, aiming to discourage the submission of claims with no merit. Industry executives said that Thomas initially opposed this move, arguing for a lower fee.
The timing of Thomas’s departure, just days before she was set to appear in front of the Treasury Committee of MPs, raises concerns about the FOS’s capacity to effectively manage the ongoing motor finance scandal. The organisation is under pressure to enhance its handling of consumer complaints over car finance mis-selling, especially as the Financial Conduct Authority considers a redress scheme that could cost the motor finance sector billions.
The motor finance scandal has recently seen His Majesty’s Treasury seek permission to intervene in the upcoming Supreme Court appeal as they search for ways to encourage economic growth. This also includes UK Chancellor, Rachel Reeves, calling on Britain’s regulatory bodies such as the FOS to find reform to ensure a “surer climate for investment.”
As the motor finance scandal continues to unfold, the FOS’s leadership transition will be critical in determining its approach to consumer protection and industry regulation.
Barings Law will continue to monitor this situation closely and update our News and Insights section with any further news.
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