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2023 Annual Report
R.92/2024
Message From the Principal Ombudsman 19 Performance Analysis 21 Financial Performance 26 Business Risks 29 Sustainability & Environmental Reporting 31
08 Accountability Report
2023 Complaints Message From the Chair 34 Statistics & Observations Governance Report 35 Staff Report 38
Financial Services Providers (FSP) Summary Complaints Statistics
Sector Observations & Case Studies
1011 39
1416 Statements
Submission Letter April 2024
Deputy Neil Inder
President
Committee for Economic Development States of Guernsey
Market Building
P O Box 451
Fountain Street
St Peter Port
Guernsey
GY1 3GX
Deputy Kirsten Morel
Minister for Sustainable Economic Development Government of Jersey
19-21 Broad Street
St Helier
Jersey JE2 3RR
30/04/2024
Dear President and Minister
As you know, the Channel Islands Financial Ombudsman is the joint operation of the Office of the Financial Services Ombudsman established by law in the Bailiwick of Guernsey and the Office of the Financial Services Ombudsman established by law in Jersey.
On behalf of the directors, I am pleased to submit the report and accounts for 2023. These take the form of a shared report accompanied by shared accounts, which include a division of overall overheads in accordance with the memorandum of understanding between you.
The report and financial statements are submitted under section 1(c) of Schedule 2 of the Financial Services Ombudsman (Bailiwick of Guernsey) Law, 2014 and article 1(c) of Schedule 2 of the Financial Services Ombudsman (Jersey) Law 2014.
Yours sincerely
About CIFO
The Channel Islands Financial Ombudsman How we work
(CIFO) is an independent service which
resolves disputes between complainants The first thing we do when we receive a
and their Financial Service Providers (FSPs) complaint is decide whether we are allowed such as banks, investment firms, financial to look at it under our laws. More details about advisors, insurance companies and others how we do this are published on our website, as set out elsewhere in this report. here. More information about the types of
complaints we can look at is also published on CIFO began operating on 16 November our website, here.
2015. We have one team and a single Board
of Directors overseeing two financial If we decide we are going to review a ombudsman bodies set up by law in Jersey complaint, we let the complainant know. We and Guernsey. The States of Jersey and then ask the FSP for its side of the story. Once States of Guernsey jointly appoint the we have all this information the case is given Board of Directors and the Board, in turn, to an adjudicator or ombudsman, and they appoints the Principal Ombudsman and start their review.
Chief Executive and any holders of the role of
Ombudsman. During our reviews, the adjudicator or
ombudsman will find out what has happened, Our aim is to resolve complaints fairly, propose settlements, and make decisions effectively, promptly, helping both sides based on what is fair to both the consumer understand our view of what a fair and and the FSP. In deciding what is fair they reasonable outcome would be. If we uphold will take into account the law, regulation,
a complaint, we can award compensation to applicable professional body standards, complainants and tell the FSP to put things codes of practice, codes of conduct, general right. industry practice, and what is fair and
reasonable in the individual circumstances of Complaints can be brought to us by the complaint.
individual consumers and small businesses
(microenterprises) from anywhere in the More information about how we work - and world. Some Channel Islands charities can the timeliness targets for our work - can
also bring their complaints to us. be found in the table on page 7 and on our
website here.
T HE C I FO TIMELINES S TARGETS
7 days 14 days 90 days 60 days
(3 months) (2 months)
STAGE 1 STAGE 2 STAG E 3 STAG E 4
Intake & Financial Service Allocation Ombudsman Assessment Provider s (FSP s) and Review Decision
Response
2023 Complaints Statistics & Observations
Complaints Statistics
The published complaints statistics summary relates to the period between 1st January 2023 and 31st December 2023. The statistical highlights during 2023 were:
179 562 515
C OM P L A INTS COMPLAINTS COMPLAIN TS CARRIED FORWARD RECEIVED CLOSED
F RO M 2022
Upheld/ Not Upheld Upheld in Part
336 343 35% 48%
CA S E S O P ENED CASES CLOSED 9%
FO R R E V I E W BY Settled by FSP 5%
C I FO Withdrawn Out of mandate
153 148 14 20 1
BANKI N G I N S U R A N C E P E N S I O N I N V E ST M E N T N O N-BA N K CREDIT 139 Jsy / 13 Gsy / 1 UK 144 Gsy / 1 Jsy / 3 UK 11 Gsy / 3 Jsy 18 Jsy / 2 Gsy 1 Gsy
TO P 3 PRODUCTS TOP 3 ISSUES
94 138
HOME E M E RG E N CY P O O R A D M I N I ST R AT I O N
INS U R A N C E A N D D E L AY
93 Gsy / 1 Jsy 73 Gsy / 64 Jsy / 1 UK
88 35 51 29
CU RRENT H E A LT H N O N-PAY M E N T F E E S/ ACOUNTS I N S U R A N C E O F C L A I M C H A RGES
85 Jsy / 3 Gsy 35 Gsy / 0 Jsy 49 Gsy / 2 UK 19 Gsy / 9 Jsy / 1 UK
Complaints = all complaints received by CIFO about FSPs whether or not they are ultimately confirmed as falling within CIFO s statutory mandate.
Cases = complaints that are within CIFO s statutory mandate (with some exceptions that may be found to be out of mandate after a closer review of the complaint).
A full breakdown of CIFO s 2023 complaints statistics has been published in CIFO s Annual Statistical Data Report for 2023 which can be located on CIFO s website, here.
FSP Summary Complaints Statistics
The published FSP summary complaints statistics relate to the period between 1st January 2023 and 31st December 2023. During this period, CIFO received 562 complaints against 121 FSPs and resolved 348*
complaints about 51 FSPs through mediation
or a binding final decision. CIFO has published a list which can be found within CIFO s Annual Statistical Data Report for 2023 which shows in-mandate complaints resolved by CIFO. All complaints withdrawn, settled by the FSP
prior to CIFO s involvement, and those found
to be outside of CIFO s statutory mandate
are not included. All FSPs are named using
the legal entity that CIFO was advised of at
the time CIFO received the complaint and provided to the FSP for confirmation. The
2023 published data can also be located using CIFO s searchable webpage, located here.
1st 31st January December 2023 2023
562 Complaints about 121r FSPeceiv sed 348* Complaints about 51r FSPesolvsed
* Due to post-period adjustments, the comparative data table assembled in Q1 2024 may have a few minor differences from CIFO s overall 2023 statistical summary earlier in this report.
BANKING
CIFO uses five sectors to describe the broad
areas of financial services relating to each
complaint. These are: Banking, Insurance, INSURANCE Investments/Funds, Pensions, and Non-Bank
Money Services/Credit. Each sector has been
reviewed to identify new and emerging issues
that CIFO has observed in the complaints INVESTMENTS/
referred to our office during 2023. Links to FUNDS
sector-specific case studies have also been
published on CIFO s website and continue
to show the types of complaints handled by PENSIONS
CIFO and the approaches taken to resolve
them. The case studies are based on actual
CIFO cases. Some specific details may be
altered to protect confidentiality. NON-BANK MONE Y
BA N KING
The volume of fraud and scam complaints remained high throughout 2023 with an increasing level of sophistication. CIFO also noticed a rise in banking complaints where accounts were blocked due to suspected fraudulent activity. Bank account closures were also prevalent and arose where customers were not locally resident or where a change in the bank s risk appetite had occurred. In some cases, banks were simply not providing a reason to their customers for closing their accounts.
In some cases, CIFO continues to encounter complaints where a bank s concerns about inappropriate use of its accounts results
in the blocking of specific transactions,
the blocking or closure of an account, or freezing of funds held in a bank account. CIFO notes that banks are under a legal and regulatory obligation to know the source of funds being transferred and to prevent the inappropriate use of accounts as part of
the global fight against money laundering and terrorist financing. The filing of and content of suspicious activity reports (SARs) made by FSPs to law enforcement agencies are strictly protected by anti-tipping-off provisions in law making it a serious offence for anyone to disclose such information. As CIFO does not currently have authorised status to receive such sensitive information, banks, and occasionally other types of FSPs,
are sometimes unable to provide CIFO with the information required to perform CIFO s statutory duty of investigation. This is an on-going priority for CIFO to resolve with the Government of Jersey and States of Guernsey.
Other complaint themes involved international transfers and the currency conversion
charges that are automatically applied when making international transfers using an online banking portal. CIFO also received complaints about international transfers where the funds had gone missing in transit. Funds were delayed because of the bank s own internal procedures and their use of correspondent banks. Complaints persisted because customers had difficulty contacting their
bank, especially when a suspected fraud had taken place on their bank accounts.
Complaints regarding banks refusals to accept, or delays in accepting, Know Your Customer documentation in the form of a UK or foreign Lasting Powers of Attorney (LPAs) or Powers of Attorney (POAs) also persisted. Similar to 2022, these complaints were ultimately due to FSPs in the Channel Islands requiring all UK or foreign LPAs or general POAs to be registered by the relevant local authorities before they would accept them to satisfy their Know Your Customer requirements.
BA N KING CASE STUDIES
Bank s inadequate investigation of a transfer leads to complainant s distress
Romance scammers trick complainant into sending money
Bank s delay in transferring funds leads to complainant s loss
Bank s inability to investigate missing overseas transfer leads
Inadequately disclosed fraudulent activity identified by bank causes additional losses
Complainant scammed by fraudster
claiming to be from cryptocurrency investment
Bank s delay in accepting a power of attorney over a bank account causes losses
Fraudster tricks complainant into divulging bank details resulting in a fraud
Complainant incurs exchange rate charges when taking bank s advice
Bank unable to help complainant who
transferred funds within a genuine bitcoin trading app to a fraudster
I N S URANCE
CIFO continued to see an increase in insurance complaints, predominantly due
to the relocation to Guernsey of several UK insurance providers bringing complaints about their business into CIFO s remit. The most common type of insurance complaints received in 2023 involved home emergency insurance, in particular boiler repair claims. CIFO also saw an increase in home insurance complaints where customers felt that the value of claims paid by their insurers was
too low. Some of these were due to the price increase of building material and labour costs.
Under most home insurance policies, customers are expected to ensure that the amount insured properly reflects the full cost of rebuilding the property in case of destruction. Any failure to reflect the full rebuild value (referred to by providers as
underinsurance ) can result in a discounting of the amount covered in case of a damage claim made for the property, even if the
damage being repaired does not require
a full rebuild. Some customers may not
have appreciated the difference between the market value and rebuild cost for their properties while others may have deliberately underinsured their properties to obtain
lower insurance premium costs. In cases reviewed by CIFO, insurance providers and brokers sought to make customers solely responsible for any underinsurance despite not having drawn sufficient attention to the issue or without having assisted customers to properly estimate the rebuild cost for their properties on their policy applications or renewals.
CIFO also continued to see health insurance complaints involving private medical insurance and the non-payment of medical claims and delays in processing the payments due to issues with insurance companies own internal payment systems.
I N S U RANCE CASE STUDIES
Health insurance claim rejected due to presumed pre-existing condition
Health insurance claim rejected due
rejected due to exclusion from policy
Motor insurance claim settled on basis of market valuation
Complainant suffered inconvenience with delayed health insurance claim payment
Building and content insurance claim rejected as an uninsurable event
Increase in pet insurance premiums leads complainant to question policy
Complaints in this sector were mostly due
to processing errors or delays or suitability of investments and advice given to complainants by their FSPs about investment and fund products. CIFO also investigated several complaints related to the lack of adequate fee disclosure and the poor performance of investment products. CIFO noted that most complaints that related to poor performance were due to the customers high expectations of market returns or customers believing they had invested in bespoke discretionary investment products.
Unsuitable investment management leads to complainants losses
Investment re-allocation results in re-investment misunderstandings
Delay in sale of shares results in losses due to exchange rate increases
P E N SIONS
The majority of complaints closed in 2023 for this sector related to poor administration or delays in transferring pension plans. The issues were mostly connected to private pension plans as opposed to employee pension plans and were due to the suitability of an element of the transfer or fees associated with the transfer or termination of the pension plans.
Misunderstanding regarding pension plan investment leads to complaint
Complainant fails to opt-out of pension scheme investment resulting in loss
N O N-BANK MONEY SERVICES CREDIT
CIFO did not receive many complaints within this sector but the complaints that were received related to poor administration because complainants felt their terms and conditions were not adequately disclosed at the outset.
Complainant believed loan terms were inadequately advised
Complainant receives bad credit rating from online payment provider
Performance Report
The following performance report provides a view of CIFO s operational performance for 2023.
A message from
the Principal Ombudsman
With our transition to a new Board of Directors from the initial group of founding directors completed in January of 2023, a number of activities were launched. These included stakeholder consultations on a future direction for CIFO and as set out in more detail in the message from the Chair, an external review to provide the new Board with assurance as to CIFO s performance of its mandate and to identify opportunities for improvement. Both of these provided welcome assurance and feedback to guide our team s work going forward.
Operational pressures continued upward due to increased year-over-year complaint volumes (up 12.4%), in-mandate case files to review (up 25.8%) and increased operating cost pressures due to high levels of inflation in Jersey for the second year in a row, finally easing off in Q4 of 2023.
Despite these pressures, the combined efforts of our Jersey-based team and experienced contracted resources from the UK managed to maintain case file inventory levels within the desired target range for work-in-progress ensuring no resurgence of a case backlog.
The extension of CIFO s mandate in Jersey to cover complaints involving occupational pension plans was delayed and is now not expected until later in 2024 at the earliest. In the meantime, the States of Guernsey s introduction of a secondary pension plan to ensure that all Guernsey employees have recourse to a pension plan, if not provided one by their employer, was introduced and CIFO has been given responsibility for any complaints arising from this new pension framework which went live for voluntary contributions on 1 January 2024 and for mandatory contributions by mid-year 2024. The effective adoption of these new areas of complaints handling responsibility, and a renewed funding structure that reflects the changing nature of CIFO s work across the financial sector, is expected to dominate our non-casework efforts through 2024.
To our new Board of Directors, our thanks for your new perspectives on our work and your commitment to engage with our stakeholders and our team to provide oversight and accountability for our important public interest role.
To our Jersey-based colleagues, including those who left us in 2023, and our experienced contract practitioners based in the UK, thank you once again this year for maintaining our ability to deliver fair and reasonable outcomes for financial consumers and Channel Islands-based providers.
Douglas Melville
COMPLAINTS CASES
562 COMPLAINTS
RECEIVED
12%INCREASE
in complaint volumes from 2022
48%
COMPLAINTS WERE CLOSED within the month they
were received
C OMPLAINTS R ECEIVED
P ER YEAR
343 CASES CLOSED
11%MORE CASES CLOSED
than in 2022
67%
CASES WERE RESOLVED
without needing a Final Ombudsman Decision
CASES RESOLVED PER YEAR
20 Complaints = are all complaints received by CIFO about FSPs whether or not they are ultimately confirmed as falling within CIFO s statutory mandate.
Cases = are complaints that are within CIFO s statutory mandate (with some exceptions that may be found to be out of mandate after a closer review of the complaint).
In 2021 and 2022 we eliminated a backlog of complaints so 2023 was a year of consolidation. Our plan going into 2023 was to prevent a backlog from developing again by ensuring we achieved a consistent, higher level of output. We achieved this while handling an increased number of complaints referred to us.
£ £1,377,426
CIFO AWARDED IN COMPENSATION
It is often heard that the standard of customer service offered by some businesses and bureaucracies has declined post-Covid. Our general experience of some local financial services complaint-handling is no different. Complainants frequently tell us their concerns are not being treated as complaints by
FSPs. This means FSPs sacrifice customer goodwill when an early resolution would retain customer confidence and consume less FSP complaint-handling resources. In addition, many complainants telephone us only to be told they have reached the wrong number;
they were looking for their FSPs contact numbers but could only find ours instead in the information readily available from their provider.
After we receive a complaint, we let the FSPs know. We typically give FSPs 14 days to give us their side of the story. But some FSPs are routinely missing this deadline. This means our work cannot progress and it causes further delays for their customers. In 2023, 31 days was the average time that FSPs took to respond to us.
In 2023, CIFO had no data breaches which needed to be formally reported to the Channel Islands information commissioners, but CIFO did seek advice regarding two incidents.
CIFO also received six service complaints which CIFO s Chair reviewed on behalf of the Board of Directors to ensure appropriate oversight of CIFO s service standards, while pointing out where things could be improved where warranted.
Year End Performance Framework
AIM | 2023 OBJECTIVES | W H AT W E D I D | O U TC O M E |
Make sure CIFO is fulfilling its core function. | Evaluate whether the recommendations and decisions made are broadly correct, fair and reasonable. | External Review commissioned to examine CIFO s complaints and complaint-handling. | External Review satisfied with outcomes in the cases examined. But limited quality assurance checks in place of the case handling itself. |
Make sure CIFO is fulfilling its core function. | Evaluate whether the organisation is achieving sufficient throughput of its cases. | Obtained weekly data for management and team to review throughput. Reports provided to Board on closures and timeliness. | External Review confirmed core function effectively met against Ombudsman good practice. |
Make sure CIFO is fulfilling its core function. | Improve CIFO s timeliness when dealing with complaints. | Prioritised resolving older cases. Provided quarterly updates to the Board on the status of the oldest cases along with statistical data on timeliness performance against CIFO s published timeframes. | Reduced the number of open cases over 12 months old. Provided outcomes within published timescales in 75% of complaints. |
Publish CIFO s key performance indicators for complaint case completion. | Collate performance data, review any issues with publishing and provide this publicly. | Obtained data at key performance stages and evaluated any gaps or disclosure issues. Established stages with timeliness targets throughout CIFO s end-to-end complaint handling process and started tracking performance against those targets for the Board. | Highlights of the data have been published in this report. Further detailed data publication is under review. |
Monitor proposed expansions to CIFO s mandate (occupational pensions and lending/credit legislation) | Obtain clarity about proposed mandate extensions and accompanying legislative changes. Provide government, industry, and regulator consultation feedback and obtain information about complaint volumes in these sectors. | Attended a number of government, industry and regulator meetings to provide feedback and details about how we would look at complaints. Received details about complaint volumes. Reviewed proposed legislation to ensure clarity and comprehensiveness. | Provided input to governments and regulators on the projected impact of proposed mandate changes on CIFO and the parties to complaints. Proposed legislation provides clarity. |
Create a policy and declaration and publish as CIFO s Service Charter. | To identify what policy CIFO wishes to adopt and communicate these commitments. | Drafted a service charter, which CIFO s Board approved for publication. | CIFO s Service Charter was published on CIFO s website and communicated through newsletter and social media. |
AIM | 2023 OBJECTIVES | W H AT W E D I D | O U TC O M E |
Make sure CIFO has sufficient staff to fulfil its core function of resolving complaints. | Recruit additional members of staff or consultants. | Two ombudsmen were appointed in 2023. Some staff left in 2023 but were replaced. | CIFO maintained its staffing level but did not increase it as anticipated. |
Make sure our staff have relevant, up-to-date industry and sector knowledge. | Increase the team s subject matter knowledge. |
on financial sector-specific topics including insurance and pensions.
| CIFO increased its staff s financial sector knowledge and maintained awareness of current events and new developments in international best practices in financial dispute resolution. |
Make sure our staff have sufficient skills to carry out their roles effectively. | Provide specific skills training for staff. | New staff underwent induction programmes and probationary period monitoring and training. Staff also received ongoing guidance on their approach to case handling and external training sessions on listening skills and responding to angry interactions. | Increased staff understanding of the skills needed - and development of those skills to carry out their roles effectively. Development of staff is an entrenched ongoing priority. |
Improve stakeholder relations. | Obtain input from stakeholders on CIFO s future strategic direction. | Future Focus Events were held in January, with meetings held in Jersey and Guernsey. CIFO s Board concluded its stakeholder meetings and reviewed the feedback. | CIFO identified areas to make improvements and is looking at objectives for CIFO s future. |
Improve stakeholder outreach. | Widen CIFO s communication methods by launching a Social Media campaign. | Created a new CIFO LinkedIn page. | CIFO now has a presence on a social media platform. |
Improve industry customer service and stakeholder relations. | To provide stakeholders with CIFO s approach to complaint handling and best practices. | CIFO completed several events for industry, regulators, and consumer bodies. | Stakeholders had an increased understanding of what they can do to increase customer satisfaction and of how CIFO can assist with this. But ongoing engagement is required. |
To share information to let stakeholders know how we work. | Publish CIFO s timeliness data. | Provided timeliness reports to the Board at quarterly meetings. | Did not publish more widely due to capacity and impact on current resources. |
CIFO s external review | CIFO completed an external review to asses CIFO s performance of its mandate. | Interviews with stakeholders were specifically included in the scope of the review to ensure that stakeholder perspectives on CIFO s performance of its mandate were included. | CIFO completed an independent External Review and the recommendations are being incorporated into plans for continuous improvement. |
Make sure CIFO s impact on the environment is scale appropriate. | Implement measures to reduce CIFO s impact on the environment. | Created an environmental policy and offset CIFO s carbon emissions. Created environmental initiatives for CIFO staff. | Reduced CIFO s impact on the environment. |
CIFO S 2024 Objectives
Three important objectives for 2024 include handling increased complaint volumes, effectively delivering on potential changes to CIFO s mandate and consulting on its funding structure. Specifically:
We will ensure that our operating CIFO will continue to ensure that complaint model is optimised to provide the inventories are managed and CIFO s flexibility to handle increasing performance is monitored against CIFO s volumes of complaints arising from published timelines. We will also continue to expansion of our mandate and the look for areas where it could enhance our anticipated growth in complaint stakeholder relations.
volumes.
These objectives may be affected by
external factors, for example the delays in
new legislation and changes to government
priorities which could cause further delays.
Other external factors may cause an increase
in CIFO s complaint volumes, for example: We will prepare for the introduction higher interest rates could increase mortgage
of complaints about public and complaints. The increase in fraud cases private occupational pensions in remains a concern. Additional risks of a Jersey, and secondary pensions in recession by the end of 2024 and the potential Guernsey. of weak global economic growth could also
cause pressures on non-financial sectors
which ultimately could lead to complaint
volume spikes. CIFO will monitor these issues
if and as they arise.
We will consult with the financial services sector about the most equitable apportionment of costs in the light of changes in the distribution of complaints between sectors, and the introduction of complaints about occupational pensions.
CIFO S 2024 Objectives
CIFO welcomes the external review carried out in late 2023 and will start to implement the helpful recommendations made by the reviewer to improve our customer service. In particular:
We will implement a soft telephone These additional objectives for 2024 are system, with the ability to record and drawn from a number of the reviewer s transcribe calls. This will provide recommendations. Some recommendations accurate records of conversations are already reflected in the staff training and with our team, enable us to track development activities referred to elsewhere enquiries made and will improve the in this report. Other recommendations will effectiveness of our case handling be prioritised by the CIFO Board in future and file management. years as resources permit. Some involve
potentially significant investment in systems development.
We will make changes to our on-line complaint form to increase accessibility and effectiveness at the complaint intake stage.
We will introduce a complainant survey, so that we can obtain feedback from complainants about how they felt about the service we provided to them.
Financial Performance
Levies and Case Fees
CIFO consults annually on its levy which
is calculated using the annual budgeted expenditure, plus any required top-up of operating reserves, minus the anticipated case fee income. CIFO s consultations have provided CIFO with valuable feedback. From the consultation regarding the 2023 levies, CIFO received some suggestions to adopt
an alternative payment structure and a more user-pays model. CIFO s Board adopted a strategy in 2023 to keep the total levies paid by industry at the level of inflation or lower and to place a proportionally greater burden on those FSPs who use CIFO s industry- funded complaint handling capacity.
2023 ANNUAL LEVY
£15,415
£1,376
£1,376
£1,376
The chart provides a breakdown of the levy Banking
each FSP paid during 2023. This is split Insurance
between sectors and applies to both Jersey Investments/Funds
and Guernsey FSPs. Non-Bank Money Services/Credit
CA S E F E E PER SECTOR
In 2022 CIFO consulted on whether to change case fees for the first time since 2018 to increase the proportion of total funding derived from users of CIFO s services.
Industry stakeholders indicated strong
support for such a change. As a result, case fees for levy paying FSPs increased by 113% to £850 and case fees for non-levy-paying FSPs increased by 50% to £1,350. These changes came into force from 1 January 2023. CIFO s Board indicated its intention to continue
to review the proportion of total funding
2022 2023 2022 2023
obtained from case fees going forward.
Non-Levy Payer Levy Payer
Case Fee Per Sector Case Fee Per Sector The graph details the increase to case fees
applicable to all sectors for both Jersey and Guernsey-based FSPs.
Financial Performance
Expense Management
At the end of 2023, CIFO had a £19,000 surplus over budget. This was due to receiving £36,000 more than budgeted in case fees but was offset by a £17,000 deficit in budgeted expenditure. The main expenditure differences from CIFO s budget were due to the individual variances noted below.
Governance Administration expenses £18,000 over budget £3,000 over budget
This was due to an external review of CIFO s The annual report, auditor fees, meetings, operations and governance undertaken at and hospitality costs were all higher than CIFO s Board direction. budgeted due to a general increase in costs.
Salaries Outsourced Services £17,000 over budget £3,000 over budget
The 2023 salaries budget included a recovery Human resources costs were also higher than of some specified CIFO management salary budgeted, due to an update to CIFO s policies costs from three Jersey public sector pension and procedures in relation to employee
plans that had been expected to join CIFO s contracts, particularly terms and benefits. remit in 2023. The unexpected delay of the
mandate extension legislation beyond the
end of 2023 meant that the specified salary Case-related expenses
costs had to be taken back into expenses £6,000
for 2023, causing the budget overage. This is
addressed in the contingent asset section at These costs are not budgeted for as they
page 17 of the 2023 financial statements. are generally unknown and only arise if CIFO
requires external experienced capacity for
resolving a specific case. CIFO incurred the Staff Related Expenses cost of a legal opinion on a regulatory matter.
£30,000 under budget
Healthcare, social security and pensions costs were all lower than expected. This was due to staff changes during the year with new staff benefits deferred until they had completed their probationary period.
Financial Performance
CIFO Financial Data
Budget Actual
INCOME EXPENDITURE
£1,273,239 £1,305,821 £1,207,537 £1,224,697
Business Risks
CIFO s directors meet regularly to oversee the organisation. The directors review various categories of risk at each meeting including financial risk (whether there are sufficient resources to meet current and projected obligations), operational risk (including staff capacity and ability to progress cases in a timely manner), stakeholder relations risk (comprising the governments, regulators, industry, and consumer and public groups across the Channel Islands) and external risks that may impact CIFO s ability to operate (influx of complaints from a specific sector).
A comprehensive risk assessment methodology and dashboard provides a continual perspective for CIFO s directors on the risks affecting CIFO, rated for both inherent and residual risk, and noting risk mitigation measures that are in place. These are reviewed quarterly.
An existing risk Insufficient Case Handling Resources changed its risk trend from
stable to increased and a new risk was identified in 2023 Financed by Stakeholders which reflects the fact that CIFO receives no government funding and is wholly reliant upon industry funding in the form of annual levies and case fees to fund its operation. The most significant risks identified by management
at the end of 2023 are set out in the table (page 30). The table also includes the risk implications, the controls and mitigation in place, and an assessment of the risk trend and whether this has increased or decreased during 2023.
lRisks rna
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k is
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Business Risks
RISK | RISK IMPLICATIONS | C O N T RO L S | M I T I G A N TS | R I S K T R E N D |
Insufficient case handling resources or poor-quality case handling | This could undermine CIFO s ability to effectively respond to complaint volumes and maintain credibility with stakeholders. | Regular reporting to Board on inbound complaints, timeliness, productivity, output, and financial resources. | Availability of experienced financial ombudsman resources on contract as required. Ongoing staff training in essential skills and subject matter areas. Regular contact with key industry stakeholders regarding their internal complaints experience (early warning system). | Increased |
Insufficient financial resources due to complaint surge | This could affect CIFO s ability to meet short-term obligations and create a need for additional intra year funding that could undermine CIFO s reputation with funding stakeholders. | Regular Board oversight of financial reports, cash flow projections, and complaint handling statistics. | Maintenance of an operating reserve as determined by the Board of Directors each year and replenished, as required, through CIFO s annual budget and levy setting process. £250,000 operating line of credit with CIFO s bank for use only with the Board of Directors prior approval. Ability to issue an intra-year supplemental levy notice (subject to consultation), if required, or accelerated invoicing of case fees. | Stable |
Judicial review (JR) of CIFO decision | This could result in unplanned legal expenses and potentially a court judgment against CIFO. The intra-year financial impact of JR legal costs could be significant if not covered by insurance. In case of an unsuccessful defence of a JR, award of an FSP s costs against CIFO could be significant if not covered by insurance. Loss of a JR could also undermine CIFO s reputation with stakeholders. | Controls include CIFO's insurance cover for legal costs and internal decision quality control policies and procedures. | Quality control measures in place regarding preparation of CIFO ombudsman determinations (final decisions). Director and officer liability policy in place that includes coverage for legal costs arising from a JR. Maintenance of an operating reserve as determined by the Board of Directors each year and replenished, as required, through CIFO s annual budget and levy setting process. £250,000 operating line of credit with CIFO s bank for use only with Board of Directors prior approval. | Stable |
Financed by Stakeholders | CIFO is funded by the firms that we report on. | Maintain a high level of stakeholder outreach to identify any issues. | Transparent communication with all stakeholders, and publish CIFO s objectives, data, and time-frames at regular intervals. | Stable |
Data breach | This could lead to the compromise of CIFO core systems, loss of case file data, or exposure of sensitive complainant or FSP information that could undermine CIFO s operating capability, reputation with stakeholders, and possible public sanction by data protection regulators. | Controls include regular staff training on cybersecurity practices. | IT infrastructure and policies developed with outside expert input. Cloud-based file storage accessed via 2-factor authentication. Cyber Essentials Plus advanced cybersecurity certification in 2019. Ongoing external assessment on a quarterly basis. Regular staff training in cybersecurity policies, procedures, and good practice. Annual independent audits to reconfirm cybersecurity certification (last conducted in 2023). Insurance coverage in place for liability and remediation costs associated with a data breach. | Stable |
Sustainability & Environmental Reporting
Since the governments adopted their strategies to address climate change, CIFO has focused its attention on its operational environmental impact. CIFO committed to considering the impacts of its actions and how they affect the environment both directly through its operations, and indirectly through the purchase of products and services, travel, and through its choice of partnerships. CIFO s environmentally sustainable practices are listed below:
. Monitor and manage its environmental performance and work towards targets set to reduce adverse impacts.
. Comply with relevant governments environmental policies, practices, regulations and legislation, and industry- specific legislation.
. Reduce the consumption of natural resources in daily operations including water, paper, and energy and maximise the recycling of resources by encouraging staff to use more green methods.
. Commit to the prevention of pollution to the environment and continual improvement to minimise the environmental impact of our operation.
. Minimise pollution by taking steps to limit carbon emissions resulting from vehicles and air travel. Where travel is required, CIFO will offset the carbon emissions by investing in Channel Islands-based environmentally sustainable initiatives.
. Where possible, encourage our suppliers to meet high standards of environmental performance. CIFO will opt for more environmentally sustainable products and partnerships, by reviewing suppliers environmental plans/policies before committing to expenditure.
. Communicate this plan to all employees, contractors, suppliers, and other stakeholders, as well as making this plan available to the public.
. Report on CIFO s environmental performance in both internal and external communications, where relevant.
. Review this policy annually and measure targets and performance as part of that review.
Sustainability & Environmental Reporting
CIFO is fortunate to have a landlord (Polygon Group) that is dedicated to progressively reviewing, implementing, and improving their performance against environmental, social and governance impacts. As part of lessening their environmental impact they continue to work on initiatives to reduce energy consumption, for example by installing solar arrays to viable properties, or offering tenants green transport alternatives. In addition, the Polygon Group remains carbon neutral by balancing its CO2 emissions using certified Plan Vivo initiatives. Plan Vivo helps create jobs and reduce poverty by supporting environmental projects used to create carbon credits.
CIFO s most significant environmental impact is related to in-person Board meetings, along with CIFO representatives attending overseas events. The nature of CIFO s operating model means CIFO s staff operate from a small office based
in Jersey but with some of its Board members resident in Guernsey and the UK. This results
in the need for travel between the islands. The table below provides an estimate of carbon emitted from this travel to and between the islands over the last five years. The decrease
from 2019 to 2020 is due to the increase in virtual meetings as opposed to physical meetings during the COVID pandemic.
CA R B O N FOOTPRINT FO R F L I GHTS IN
TO N N E S
To help offset CIFO s carbon footprint, CIFO s Board has allocated annual funding to donate to local Channel Islands environmental initiatives and projects. In 2023 CIFO supported the following:
In the Bailiwick of Guernsey:
. Guernsey Trees for Life
. Grow Limited
. La Societe Guernesiaise Nature Section
. The Soil Farm
. Alderney Wildlife Trust Living Seas
. The Clean Earth Trust
. The Pollinator Project
. Guernsey Bailiwick Bat Survey
In Jersey:
. Jersey Trees for Life
. Beresford Street Kitchen
. SociØtØ Jersiaise Nigel QuØrØe Environment Award
. Grow Jersey
. Jersey Marine Conservation
. Acorn Enterprises
. Jersey Pollinator Project Parish of St Helier Pollinator Patches
. Jersey Bat Group
2019 2020 2021 2022 2023
This is based on the www.carbonfootprint.com (carbon footprint calculator), which provides an estimate only.
Accountability Report
The purpose of this report is
to demonstrate how CIFO has implemented principles of good governance.
A message from
the Chair
This annual report covers the year since my appointment as Chair of the CIFO Board in January 2023. It has been a fascinating year.
As I grow more familiar with the unique and important role that CIFO plays and the environment in which it operates, I am struck by the complexity of issues that our small office encounters. Each of the Channel Islands jurisdictions has its own character and strategic approach to the provision of financial services, both for its own population and for the global customer base which they serve.
To help the new CIFO Board quickly become familiar with the environment and the needs and aspirations of all stakeholders for CIFO s dispute resolution services, and to ensure that we could respond to emerging challenges, at the end of 2022 we embarked on an extensive consultation on CIFO s future direction. This has provided us with rich material for our Board s strategic discussions, and for our organisational priorities for 2024 and beyond.
CIFO enters its 9th year of operation later in 2024. To give the Board assurance that the office is performing its important public interest role in accordance with its legislation and good ombudsman practice, we engaged an independent external reviewer to conduct an in-depth assessment of the organisation, including extensive stakeholder interviews and a detailed review of randomly selected case files.
The Board was pleased to receive assurance that CIFO was performing its statutory function with integrity and in accordance with good ombudsman practice. The reviewer also identified a number of opportunities for CIFO to continue to improve, which the Board has been discussing with management and will be worked into priorities as resources permit. We have firm foundations, but there is always room to do better.
I am pleased to report that the organisation has weathered the increase in complaint volumes and cost pressures due to inflation well. The team has remained on top of an increased complaint workload, preventing a return to the backlogs of its initial years when resources chased an ever-increasing load on the organisation. We have restored reserves, and during 2024 will discuss with our stakeholders how best to apportion costs as CIFO s remit and workload continues to evolve most notably with the proposed introduction of certain occupational pension complaints from both islands, and changes in the mix of complaints between the various financial services sectors. The Board remains focused on ensuring that CIFO has the resources it needs to discharge its statutory duties, while minimising the burden on financial services providers by controlling our costs.
On behalf of the Board of CIFO, I wish to thank the entire team based in the Channel Islands and the UK-based contract Ombudsmen who bring their experience to supplement CIFO s capacity as required.
I also thank my Board colleagues for entering into their new roles with such enthusiasm, and for engaging in collegial discussion and constructive challenge of management in the best spirit of good governance. I look to CIFO s future with confidence.
Antony Townsend
Governance Report
Role and Effectiveness of CIFO S Board
CIFO s Board is accountable for the effective oversight of the operations of CIFO but it remains mindful that the CIFO team operates independently from the Board and other stakeholders.
CIFO s Board uses a comprehensive risk assessment methodology to review CIFO s effectiveness and CIFO s management
team feed data into a dashboard which provides CIFO s Board with a continual perspective on the risks affecting CIFO,
rated for both inherent and residual risk,
and noting risk mitigation measures that
are in place. These are reviewed quarterly
by CIFO s Board. At each quarterly meeting CIFO s Board conducts an in-depth review
of CIFO s operations against one or more
of the fundamental principles for effective financial ombudsman schemes set out by the International Network of Financial Services Ombudsman Schemes and the Service Standards Framework of the Ombudsman Association. In the past, CIFO has been found by the Board to be generally consistent with the fundamental principles and standards
and those opportunities for enhancement identified are implemented by management as resources permit.
In 2023 CIFO s Board engaged an outside
AnDesignerthony Barbapiccola expert to conduct an independent review of
An award winning agency www.getrefined.com CIFO s operations to provide the Board and telephone+44 (0) 1534 720 200 11 Paddresseter Street | St Helier | Jersey JE2 4SP all stakeholders with assurance that CIFO s
office is performing effectively, efficiently and in accordance with good financial ombudsman practice. CIFO s Board has taken the results of this review into consideration and developed a prioritised strategy for CIFO. This will prompt CIFO to continually improve its performance for its important public interest mandate.
CIFO s Board
CIFO remains committed to the continued transparency of its operations. The expenses of the Chair and Directors as well as those of the Principal Ombudsman are posted
on CIFO s website, here. Chair and Director remuneration and attendance records at the Board of Directors meetings are provided in this annual report. Minutes of the Board of Directors meetings are posted on CIFO s website, here.
CIFO S BOARD
(as of April 2024)
Antony Rob Townsend Girard
Chair Vice-Chair
Jennifer Hayley Carnegie North
Governance Report
Antony Townsend
Currently serves as Chair of the Determinations Panel of the UK Pensions Regulator (TPR), and Chair of Entrust (the regulator of the Landfill Communities Fund in England
and Northern Ireland). He brings deep experience in complaints handling and regulation. He previously
served as the UK s Financial Regulators Complaints Commissioner, a Director of the Ombudsman Association, Chair of the UK and Ireland Regulatory Board of the
Royal Institute of Chartered Surveyors, Chair of the Regulation Board of the Association of Chartered Certified Accountants, and Deputy Chair of the UK Professional Standards Authority for Health and Social Care. Antony is also a former Chief Executive of the Solicitors Regulation Authority and General Dental Council in the UK. In the first part of his career, he was a policy civil servant in the UK Home Office working primarily on criminal justice issues.
Jennifer Carnegie
Is the co-founder and Chief Operating Officer of the strategic leadership consultancy firm Amicus Limited
and is Chair of Jersey Business. She was formerly the President of the Jersey Chamber of Commerce and was a Jersey Appointments Commissioner. Jennifer previously held the role of Chief People Officer for Digicel, an international telecommunications firm, and was a global Learning and Development Director for Mars Incorporated, the multinational fast-moving consumer goods company.
Rob Girard
Fellow of the Chartered Institute of Bankers and served over 45 years with NatWest Group. He was a member
of the RBS International Executive Committee for over 12 years, Country Head for the Group in Guernsey, and Director of the Institutional and Corporate Banking business in Guernsey during that period. He was also a Director of the NatWest Group Global Captive Insurance Company for over 12 years. He is Chairman of the Guernsey Banking Deposit Compensation Scheme and
a Commissioner of the Guernsey Language Commission which is engaged in the revitalisation of Guernsey s native language, Guernesiais. He also served as a member of the Juvenile Panel of Guernsey s Royal Court for 6 years. He has recently been appointed as a Commissioner of the Guernsey Financial Services Commission.
Hayley North
Is the Managing Director of Rose & North Ltd which she founded in 2012. Hayley has over 25 years experience in financial services and is a member of the advisory group to the Investment Association s Sectors Committee. She is a Fellow of the Personal Finance Society, a Chartered Financial Planner and regularly presents at conferences as well as contributing to
the Daily Telegraph s Money Makeover segments. As
a financial adviser, Hayley has also won a number of awards.
Governance Report
C I FO B OARD ATTENDANCE & REMUNERATION
Board Member | Position | Board Attendance | Attendance Rate | Total 2023 Pay | Bonuses and other incentives | Start Date | End Date |
David Thomas | Chair | 1/1 | 100% | £2,000 | NIL | 15-Aug-14 | 31-Jan-23 |
Debbie Guillou | Director | 1/1 | 100% | £625 | NIL | 31-Jan-15 | 31-Jan-23 |
John Mills | Director | 1/1 | 100% | £625 | NIL | 31-Jan-15 | 31-Jan-23 |
Antony Townsend | Chair | 4/4 | 100% | £22,625 | NIL | 31-Jan-22 | 31-Jan-26 |
Rob Girard | Vice-Chair | 4/4 | 100% | £7,500 | NIL | 31-Jan-22 | 31-Jan-25 |
Jennifer Carnegie | Director | 3/3 | 100% | £6,875 | NIL | 31-Jan-23 | 31-Jan-27 |
Hayley North | Director | 3/3 | 100% | £6,875 | NIL | 31-Jan-23 | 31-Jan-28 |
C I FO B OARD REGISTER OF INTERESTS
Board Member | Paid Employments/Consultancy | Company | Other Public Appointments | Unpaid appointments in charitable/other body |
Antony Townsend | Chair, Determinations Panel of the UK Pensions Regulator Chair, Entrust (Landfill Communities Fund regulator in England and Northern Ireland) Chair, Strategic Advisory Board, Bar Tribunals and Adjudication Service UK Independent Investigator, Independent Complaints And Grievance Service, House of Commons UK | Director, Environmental Trust Scheme Regulatory Body |
|
|
Jennifer Carnegie | Chair, Jersey Business Non-Executive Director, Condor Ferries Co-opted Director, Channel Islands Cooperative Society (term ended 27 February 2024 | Director, Amicus Limited Director, Ivory Limited |
|
|
Rob Girard | Chair, Guernsey Banking Deposit Compensation Scheme Commissioner, Guernsey Financial Services Commission | Director, JamesCo 750 Limited | Fellow, Chartered Institute Of Bankers | Commissioner, Guernsey Language Commission |
Hayley North |
| Director, Rose & North Ltd |
| Member, Investment Association s Sectors Committee |
Staff Report
Our colleagues join us with experience gained in a variety of areas, including financial services, law, accountancy, law enforcement, and regulation. CIFO is committed to an inclusive workplace where those who work with us share our values and are committed to resolving disputes fairly and impartially.
All new permanent appointments are made Like many small organisations, it is more following an open recruitment process. cost-effective for CIFO to bring in experienced Our management team consists of the capacity when needed rather than make Principal Ombudsman and Chief Executive, permanent additional hires. CIFO retains the an Ombudsman and Manager of Complaints services of five contract ombudsmen on a Resolution, and a Manager of Finance and consultancy basis. The reactive nature of our Administration. work means that there will be periods when
the volume of complaints referred to CIFO
At the end of 2023, there were nine varies. Because of our relatively small size, permanent team members. CIFO appointed it is not always the most effective use of our one additional Adjudicator, two additional training time and financial resources to recruit Ombudsmen and two additional Case Officers permanent staff when there is an increase of
to replace one Adjudicator, one Administration complaints, so the contract ombudsmen act Officer and two Intake and Assessment as a means of easy access to flexible case Officers that departed during 2023. handling capacity. Organisations such as
the UK Financial Ombudsman Service retain All members of the complaints resolution associate ombudsmen in a similar way.
team undergo initial and ongoing training
tailored to their specific needs and In addition to handling cases, with more requirements. In the past year the team than 100 years collective experience the members have, variously, been on week-long contract ombudsmen provide valuable induction programmes, ongoing probationary capacity for CIFO to draw upon for input into period training and subject matter training in complex case reviews or emerging issues insurance, trusts, and pensions. In addition to for the organisation. They also provide
this, all adjudicators have completed one-to- training and mentoring for their Jersey-based one training programmes with experienced colleagues and input into ongoing project contract ombudsmen. The CIFO team were work by management. More widely, services also given training by the Samaritans to outsourced by CIFO include IT support, develop listening skills and think about how legal advice, human resources, and website we respond to individuals who are going development.
2023 Audited Financial Statements
CHANNEL ISLANDS
C O N TACT
Channel Islands Financial Ombudsman PO Box 114
Jersey
Channel Islands JE4 9QG
Jersey: 01534 748610
Guernsey: 01481 722218 International: +44 1534 748610 www.ci-fo.org enquiries@ci-fo.org
AU D I TO R S
RSM Channel Islands (Audit) Limited 13/14 Esplanade
Jersey
Jersey: 01534 816000 www.rsm.global/channelislands
Credits for production and layout: The Refinery, Jersey, Channel Islands
CHANNEL ISLANDS FINANCIAL OMBUDSMAN 8 STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
Notes 2023 2022
GBP GBP GBP GBP
Fixed assets
Intangible assets 5 14,393 23,051 Tangible assets 5 2,983 686 17,376 23,737
Current assets
Unbilled case fees 6 75,600 124,800 Debtors and prepayments 7 22,114 19,896 Cash and cash equivalents 8 414,747 275,205
512,461 419,901
Creditors: Amounts falling due
within one year
Creditors and accruals 9 49,951 48,791
Net current assets 462,510 371,110 Net assets 479,886 394,847
Capital and reserves
Accumulated surplus 11 479,886 394,847 479,886 394,847
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 16 April 2024.
Director
The accompanying notes on pages 1 Oto 21 form an integral part of these financial statements.
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