The Chair of the UK’s Financial Ombudsman Office (FOS) has announced she will be stepping down at the end of her current term in August. The announcement came only days after the agency’s chief executive also suddenly departed.

Baroness Zahida Manzoor said in a statement it had been “an honour and a privilege” to have led the agency as its chair for six years, during which she said “much has been achieved.”

The day after the announcement last week, she was answering questions from MPs at the Parliament’s Treasury Committee to discuss the work of the agency, which handles consumer complaints within the finance sector. And, understandably, MPs were curious to know the reasons why the FOS’s chief executive, Abby Thomas, had unexpectedly left her role the previous week.

Baroness Manzoor refused to get into the details of what had happened, insisting that it was a “mutual decision” and that she wished the departed CEO all the best in her future career.

Asked if she was concerned that the leadership situation at the FOS might lead to a lack of confidence in the agency, Baroness Manzoor said: “No, absolutely not. I am there till the first of August. We have two very good people in terms of leadership. We have a strong leadership team. We have a strong board with a lot of expertise.”

Change needed

During what could potentially have been her last appearance before a parliamentary committee, the outgoing FOS Chair accepted that changes needed to be made to the way the agency worked.

She suggested that Parliament looks at certain laws, such as the UK’s consumer credit legislation, which she said was “very complicated and outdated.” She also insisted on the FOS’s role as consumer protector, adding that certain flaws in how financial sector consumers in the UK were compensated needed fixing.

But consumer protection and compensation are also the issues for which the FOS has come under criticism, with business bosses arguing that the agency is over-friendly towards consumers, the FT has reported.

These latest developments at the FOS come at a time the entire UK financial regulation sector is going through a period of uncertainty and constant external pressure.

Last month, ministers removed the head of another key regulator, the Competition and Markets Authority (CMA), from his role because they said he had “a different strategic approach to growth.”

UK regulators have also faced pressure and criticism from the government as well as from the parliament in recent months for not doing enough to encourage growth and investment.

On Thursday, business secretary Jonathan Reynolds said MPs were looking at behind the scenes plans to reshape the country’s regulatory landscape, suggesting there might be more regulators than were needed.