FOS can no longer say it wasn’t told about GAP

At last, albeit long overdue, we have now received a response from the Financial Ombudsman Service (FOS) confirming that our concerns and evidence regarding GAP insurance have been put before James Dipple-Johnstone, and that we are to expect a response shortly.

Our understanding of “shortly” may differ, but the fact our evidence has been confirmed as received and put before the Chief Ombudsman matters.

This is no longer a case of the FOS being able to hide behind delay, bureaucracy or convenient ignorance. It has now been formally put on notice, and the evidence has been seen. The concerns have been raised in detail and, crucially, the relevant people within FOS have now been made aware of them.

The question now, what does FOS intend to do about it?

The material we have put before FOS is deeply serious. It includes evidence of grotesque undisclosed commission levels in GAP insurance, suitability concerns that go to the heart of whether these products should have been sold at all, and even evidence of Discretionary Commission Arrangements, the very type of corrosive commission model that has already detonated so spectacularly in the motor finance market.

If that is not enough to trigger alarm bells, what is?

This is evidence pointing towards the next mass systemic mis-selling scandal. Where FOS becomes aware of that possibility, it should not simply sit on its hands and wait for individual complaints to drip through the door. It has a regulatory obligation to share findings of potential widespread consumer harm with the FCA.

That point has been put to FOS directly.

The FCA, for its part, has also been provided with our evidence. Yet the response has been exactly what we have sadly come to expect… total radio silence. It is impossible not to see echoes of the regulator’s shameful handling of motor finance whistleblower Paul Carlin, whose warnings were also met with inertia before the scandal became too large to ignore.

We have seen this script before. A regulator is warned. Evidence is supplied. The concerns are serious. The potential consumer harm is obvious. And yet nothing appears to happen until eventually the scandal becomes public, the pressure becomes unbearable, and the same authorities scramble to look as though they were in control all along.

That cannot be allowed to happen again with GAP insurance.

So we have adopted a two-pronged attack, one aimed at FOS, and one aimed at the FCA. Both organisations have now been put on notice. Both have been given the evidence. Both know the seriousness of the concerns being raised.

FOS has now confirmed that our evidence and concerns have been escalated and that we should expect a response shortly. That is welcome, even if overdue. But acknowledgment is not action, and warm words will not be enough.

A proper response, proper scrutiny, and proper accountability is required.

If the evidence already provided points to what it appears to point to (and it does), then this is not a niche issue or a handful of bad sales. It is a question of whether GAP insurance has, for years, been quietly infected by the same culture of secrecy, conflicted incentives and consumer exploitation that has already disgraced other parts of the financial services market.

The implications are enormous, and FOS now has a choice. The FCA does too.

They can act early, act decisively and prove that warnings of consumer harm are taken seriously. Or they can do what regulators and ombudsmen too often seem to do… delay, deflect, and hope the issue goes away.

It will not go away, we will not allow it to go away and more representatives are joining us in the fight for justice.

The evidence has been handed over. The concerns have been clearly stated. The warnings have been given.

No one at FOS can now say they were not told., and no one at the FCA can pretend they did not have the chance to get ahead of this.

The clock is now ticking, stay tuned.