IRHP - Independent Reviewers to Remain Silent?

7th November 2014

It sounds like the perfect job; sitting around all day in a comfortable office, whilst not being allowed to utter a word. Sure enough, at some stage there is a requirement to make some sort of decision, and put pen to paper (fingers to keyboard) but that’s a minor detail.
Not only are the banks trying to wriggle out of face to face meetings, but the independent reviewer is gagged, unable to utter a word. What is the point in having the independent reviewer then?

It is time their role was tested, and the FCA explains more fully the part they play in what is a section 166a from the Financial Services and Markets Act. Many of the redress offers made by RBS/Nat West have yet to formally confirm that the Provisional Redress decision has been formally sanctioned by the independent reviewer. There are several thousand of these still to be confirmed.

The FCA has stated that:

"To ensure that alternative products are offered in the right circumstances, banks need to show that this is what the customer would have purchased had the regulatory requirements been complied with, and support their reasoning with evidence and customer testimony. The determination will be verified by an independent reviewer"

If an independent reviewer has looked at, considered and sanctioned an alternative product, why can’t they be questioned as to why they agreed to it, the thoughts behind how they came to agree it, and how they interpreted the application of the regulatory requirements?

Furthermore, despite hiding behind ‘case closed’ (Barclays) and ‘we will get back to you at some time in the future’ (RBS/Nat West) there is an built-in appeals process to the review offer made and in the first instance at least, it is getting together for a face to face meeting, where, according to the FCA ‘The banks and independent reviewers will carefully consider any points raised by customers, and if necessary, will change their decision’.

How can a client be confident that the independent reviewer has carefully considered the points raised if they can’t talk at the meeting, and if the customer is not allowed to see the thought process that led to the determination of what redress they were offered? Is there any evidence or cases out there where the independent reviewer has stood their ground, not agreed with the bank, and insisted in a different outcome, or have they just gone along with them?

It would be interesting to see, particularly with the thousands of Provisional Determinations received from RBS/Nat West that still await formal sanction from the independent reviewer whether a single one is over-turned. Chance would be a fine thing, but statistically, it would be significant if there is not, and would the terms of the section 166 have been met if there wasn’t?

Simon Jaquiss