8:05 am, February 12, 2025
The Financial Ombudsman Service (FOS) is using AI to help it handle more than 60,000 complaints relating to motor finance commissions, MPs have been told.
The body says it has been inundated with cases linked to the ongoing car finance scandal and have set up a specific team to deal with complaints.
However, with so many complaints to handle, the service is having to take an ultra-modern approach in order to stay on top of proceedings.
Appearing before the Treasury Committee, James Dipple-Johnstone, interim chief ombudsman at the FOS, said that AI was being used to help digest and summarise documents.
However, he insisted that it was not being used to decide cases alone.
‘We are not deciding the cases using AI, we’re using them as tools to help us process the cases more effectively,’ he told MPs on the committee.
‘We’ve got over 60,000 cases with us relating to motor finance commission.
‘So it is quite a significant block of work, which is why we’ve put a team onto it, not just to leave it there until the courts decide what they’re going to decide, but to start to prepare it so we can move it through quickly.
‘Because we’ll have to be dealing with that next year and the year after.’
The comments come as the Supreme Court is due to decide whether to uphold last year’s landmark ruling against Close Brothers and FirstRand Bank.
During the session with MPs, Dipple-Johnstone was asked whether the current crisis. could end up rivalling the PPI scandal.
He said: ‘Obviously the service saw a lot more during PPI but there was a wider selling of that kind of product.’
He added colleagues had said of the PPI scandal: ‘It was a slow burn, then it increased quite dramatically, and then the service cleared the work through.
‘So what we’ve tried to do is learn from that event, prepare our ground, make sure we’ve got the training in place, we can scale up our resources quickly, we understand the product, we’ve got the legal advice, we’ve got the digital platforms to deal with the cases, so that if they do come through to us, we’re able to scale up quickly, so we can provide the best service we can to customers.’
Committee members also asked multiple questions about the departure of Abby Thomas, who joined the FOS in October 2022. Thomas’s departure as chief executive and chief ombudsman at the FOS was announced on Thursday last week.
FOS chairwoman Baroness Manzoor told the committee several times during the hearing that the departure was a mutual agreement, adding: ‘We wish her well for the future.’
On Monday, the FOS said Baroness Manzoor will be stepping down after serving two terms of office, when her current term expires on August 1.
Asked by the Treasury Committee on Tuesday if the FOS is a rudderless organisation, she told the MPs: ‘I’m there until August 1. It is certainly not rudderless.’
She added: ‘I have a very experienced board.’
