Financial Ombudsman Service

The Financial Ombudsman Service (FOS) provides an independent and impartial mechanism for resolving complaints between consumers and financial service providers. It plays a critical role in adjudicating disputes without the need for court proceedings, particularly in cases involving banks, insurers, and other regulated financial businesses.

Areas Covered

• Banking and current accounts
• Insurance policies (including car, travel, and home)
• Mortgages
• Credit cards and store cards
• Personal loans and credit agreements
• Pensions
• Savings and investment products
• Hire purchase agreements and pawnbroking
• Money transfer services
• Financial and investment advice
• Stocks, shares, bonds, and unit trusts

Making a Complaint

Before referring a complaint to the Financial Ombudsman Service, the consumer must first raise the issue directly with the financial business concerned. That business then has up to eight weeks to resolve the complaint.

If the matter remains unresolved after this period, or the consumer is dissatisfied with the response, they may escalate the complaint to the FOS. This must be done within six months of receiving the business’s final response.

Additionally, the complaint must usually relate to an issue that arose within the last six years, or within three years of the consumer becoming aware (or ought reasonably to have become aware) that there was a problem.

The FOS will not consider complaints where the issue simply concerns dissatisfaction with the outcome of a product (e.g. poor returns) or the refusal of a loan, unless the refusal was discriminatory or based on incorrect information.

How Complaints Are Handled

Initial Resolution: Adjudication and Mediation

Upon referral, an FOS adjudicator will assess the complaint. The adjudicator’s role is to encourage early resolution through informal mediation or by issuing a recommended settlement. If both parties accept this recommendation, the matter is resolved.

If either party rejects the adjudicator’s recommendation, the complaint may proceed to a more formal adjudication.

Formal Adjudication

Where informal settlement is unsuccessful, the adjudicator will issue a formal written assessment. This document sets out whether the complaint is upheld and the reasoning behind the decision. Either party can reject this outcome and request a final determination by an Ombudsman.

Final Decision

The Ombudsman will issue a final decision which is binding on the business if the consumer accepts it. If the consumer does not accept the decision, they may pursue the matter through the civil courts. The business, however, is bound by the Ombudsman’s final ruling if the consumer accepts it.

Compensation and Remedies

The overarching aim of the FOS is to place the consumer in the position they would have been in had the financial business not acted incorrectly. This may involve compensation for financial loss, distress, or inconvenience. The maximum amount the Ombudsman can award is £100,000.

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