The Financial Ombudsman Service, under proposed new legislation set out in yesterday’s draft Financial Services Bill, would be required to publish reports on its determinations into consumer complaints, naming and potentially shaming businesses involved.

Currently the details of individual FOS determinations remain confidential but under the reforms businesses will be named – even if the case against them is found to be groundless – while complainants will remain anonymous.

These reforms set out to improve transparency, yet create inequality. Were the case heard in court both parties would be named.

The reforms mean businesses will be less inclined to refer cases for a final determination because even if they defend the complaint successfully, they may still suffer reputational damage.

By contrast, a complainant that, say, may have been found to have lied will remain anonymous.

This will put pressure on businesses to settle complaints made to the FOS at an early stage to avoid adverse publicity – whether they are right or wrong – and will make them even more vulnerable to targeting by claims management companies.

Firms will require clarification of the exception to this proposed rule where the Ombudsman deems publication ‘inappropriate’ – and whether they can apply for such a ruling.