FOS responds on Mills Review

The FOS has published its response to the Mills Review on the impact of AI on retail financial services. It says:

• it has seen an increase in consumers using AI to make complaints and generally to correspond with the FOS, and it sees the benefits that many consumers take from using it – such as to format, proofread, and to help those who find it hard to express themselves in writing to do so. If used well, it can help consumers make clear submissions. However, if generative AI is used excessively or inappropriately, it can make submissions at best long and at worst incoherent or contain “hallucinations” (that is, references to regulations or past decisions that do not actually exist). The FOS is concerned at the amount of caseworker time being taken up with verifying the accuracy of AI generated content. It says it is aware the industry is suffering similar challenges with generative AI-driven hallucinations, which is driving up response times and delays in the complaints process. In principle, it prefers to hear what it calls the consumer’s “authentic voice”, but has published guidance for both case handlers and consumers on using and dealing with AI;
• it has seen similar behaviour from professional representatives, which it says is concerning given the representatives are looking to recover up to 30% of any redress award, and moreover the scale when used by these representatives can cause operational challenges for the FOS. It cites submissions responding to a short provisional decision which run to 200 pages and contain multiple inaccuracies; and
• it has received very few complaints about regulated firms using AI but is aware that the risks are increasing as firms increase their use of AI.