Financial Ombudsman Service chief ousted amid board disputes

The Financial Ombudsman Service (FOS), a crucial entity in the UK's financial regulatory landscape, faced significant internal turmoil leading to the resignation of Abby Thomas, who had been in her role for less than two and a half years. Her departure, announced on February 6, 2025, follows growing challenges within the organization, particularly regarding disagreements with fellow directors over the imposition of a fee for claims management companies (CMCs). This tension arose amidst increasing pressure from the UK government for economic accountability, suggesting a broader concern regarding the influence of public and governmental expectations on regulatory agencies. Abby Thomas's tenure started in October 2022, marked by calls for financial reform and the need to address complaints from consumers against financial service providers. The board had been divided over a proposal for a £250 fee on CMCs, which had been supported by many banks and insurers who believed that such a fee would mitigate frivolous claims. However, insiders revealed that Thomas advocated for a significantly lower fee, possibly as little as £25, which created friction with other board members who felt a stronger stance was necessary. Pressure from the UK government intensified in the wake of the economic challenges facing the country, with efforts to stimulate growth resulting in increased scrutiny on regulators like the FOS. This external environment paralleled internal dissent, culminating in Thomas losing the confidence of key figures in the organization, including the FOS chair, Baroness Manzoor. Although the government’s role in her exit was not explicitly stated, a bank executive commented that the atmosphere of discontent surrounding regulatory practices contributed to her departure. Following the announcement of her stepping down, the FOS established interim measures to ensure leadership continuity, appointing James Dipple-Johnstone as the acting Chief Ombudsman and Jenny Simmonds as interim Chief Executive. Both individuals are expected to manage operations as the FOS reflects on its leadership structure and seeks to recover stability. Abby Thomas expressed gratitude for the opportunity to lead during a transformative period, highlighting her commitment to the organization’s objectives and the support of the Ombudsman team. This transition in leadership opens a new chapter for the FOS amid a backdrop of evolving regulations and expectations across the financial services in the UK.