The Treasury's consultation paper on the transition of product complaints published last month may not seem to be the most important paper to emerge in recent times.

Yet it should not be brushed aside: the implications are potentially extremely serious.

The paper, Mortgages and general insurance regulation: transitioning complaints, seeks views on whether the Financial Ombudsman Service (FOS) should be given automatic powers to deal with complaints made after the FSA takes over the reins in January 2005 about products bought from GISC members before that date.

At first glance it is not particularly concerning, but look a little deeper and the implications become far more troubling.

First, brokers will have to bear the burden of a case fee for each complaint brought before the FOS - in stark contrast to complaints made through the GISC where no such fee is attached.

At present the FOS fee amounts to £600. This is a significant sum for smaller brokers and some fear that the public could take advantage of this to force settlements.

Second, the FOS will be applying standards retrospectively. Brokers working to GISC standards will be judged against FSA standards, which have yet to be fully crystallised and which they are not otherwise required to meet.

It is imperative that brokers consider the consultation paper and make their voices heard. The fact that it is hidden away on the Treasury's website when most people's focus is on the FSA's site, does not help matters.

The paper can be downloaded from the Treasury's website: . The deadline for responses is 21 November 2003.

Michael Faulkner