UK lawmakers want answers on departure of financial ombudsman chief (updated)

S&U

11/02/2025 17:50

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      Abby Thomas left by mutual consent - FOS chair
    

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      FOS chair also announced plan to step down
    

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      Lawmakers demand more answers from FCA, FOS
    

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      Departure comes amid pressure from government to foster
growth
    

  
 (Adds lawmakers' letters with renewed questions over chief
ombudsman departure, paragraphs 6 and 7)
    By Kirstin Ridley
       LONDON, Feb 11 (Reuters) - British lawmakers demanded
more answers after being told on Tuesday that the head of
Britain's Financial Ombudsman Service (FOS) left by mutual
consent and her departure had nothing to do with the handling of
motor finance mis-selling cases.
    In a tetchy grilling by the cross-party Treasury Committee
to discuss the work of the consumer complaints body, Chair
Zahida Manzoor repeatedly refused to be drawn further on the
circumstances of last week's sudden exit of Abby Thomas after
two years in the job.
    Tuesday's parliamentary evidence session comes as finance
minister Rachel Reeves steps up pressure on regulators and
public bodies to ease the burden on businesses to ignite
stagnant economic growth.
    "We just want to know: Was she pushed or did she jump?"
asked Meg Hillier, the chair of the Treasury Committee.
    "It was a mutual agreement," Manzoor said. "Abby stepped
down and we wish her well."
    Following the session, Hillier promptly penned a letter to
Manzoor and the Financial Conduct Authority (FCA), which
appoints senior FOS staff, saying the circumstances surrounding
Thomas' departure "did not appear to be fully shared with the
committee".
    She laid out a series of questions, ranging from details
about any severance payment and whether the FCA had played a
role in the departure to whether the board had raised any
concern about Thomas's work, and asked for a response by close
of business next Tuesday.
    Asked during the hearing if she could rule out whether
Thomas's departure had anything to do with how complaints about
motor finance were being handled, Manzoor responded:
"Absolutely. I can rule that out. Yes."
    Manzoor, who on Monday also announced her own exit at the
end of her second term in August, said there had been no
non-disclosure agreement - a gagging clause often used to
prevent discussion about job departures - and that any severance
payment would appear in the FOS's public accounts.
    Reeves has called for a better climate for investment and
last year urged the FOS and FCA to improve how they handled
"historic market practice and mass redress events" amid industry
fears that banks might have to pay tens of billions of pounds in
compensation over motor finance mis-selling allegations.
    The FOS has been dealing with a fresh wave of consumer
complaints after the Court of Appeal ruled last year that it was
illegal for banks to pay a commission to a car dealer without
obtaining a customer's informed consent.
    Resolutions are on ice ahead of a Supreme Court ruling this
year.
    However, Reeves wants to shield lenders from a hefty bill
and ensure a healthy motor finance market.
    

 (Reporting by Kirstin Ridley
Editing by Alexandra Hudson)
 ((kirstin.ridley@thomsonreuters.com; +44 (0) 207 513 5666;))