The head of the UK’s Financial Ombudsman Service quit unexpectedly on Thursday in the middle of a major review of the consumer redress system in the financial services sector.
The departure of Abby Thomas, who has run the ombudsman since October 2022, comes as the government is stepping up pressure on all of Britain’s main regulators to ease the burden of rules on businesses in an effort to boost the country’s flagging economy.
The ombudsman has attracted criticism from the City of London for awarding compensation to customers who say they have been mistreated by financial services groups, which industry executives says deters foreign investors from the sector.
Chancellor Rachel Reeves last year called on the FOS and the Financial Conduct Authority to improve how they handle “historic market practice and mass redress events” amid fears that banks may have to pay billions of pounds in redress over motor finance mis-selling allegations.
The FOS and FCA outlined potential changes to the financial redress system in November, including giving companies longer to respond to customer complaints and reducing the scope to appeal against ombudsman decisions. A consultation closed last Friday, with proposals expected in the first half of this year.
Thomas has been replaced on an interim basis by her deputy James Dipple-Johnstone taking over the chief ombudsman role, with chief finance and risk officer Jenny Simmonds becoming chief executive.
