What does the Financial Ombudsman Service do, and should you refer your complaint to them?
If you have made a complaint to a bank, or a financial institution, and they have rejected or not upheld your complaint, it does not necessarily mean it is the end of the road. You may be able to refer your complaint to the Financial Ombudsman Service.
The Financial Ombudsman Service was set up following the enactment of the Financial Services and Markets Act 2000, and is an independent complaints service that aims to resolve matters without the formality of court proceedings. The Financial Ombudsman Service does not charge consumers a fee for considering complaints. They deal with a variety of financial disputes, such as those concerning bank accounts, insurance, loans, mortgages and financial advice. This is not an exhaustive list of the matters they can consider, and the Financial Ombudsman Service website provides more detailed information about the sort of matters they can assist with and how they handle complaints.
What are the differences between a complaint to the Financial Ombudsman Service and court proceedings?
As highlighted above, the Financial Ombudsman Service aims to resolve matters without the need for court proceedings. Court proceedings can be very expensive, and time-consuming, and, whilst the Financial Ombudsman Service is currently facing some delays in considering complaints, in our experience the process can be much quicker than seeing a court case through to trial.
Court proceedings often also involve time-consuming procedural steps such as disclosure and the preparation and exchange of witness statements. None of these steps are required when making a complaint to the Financial Ombudsman Service.
The Financial Ombudsman Service also approach complaints differently than a court would when making their decision. Where the court will consider strict legal principles and apply the same to the facts of a claim, the Financial Ombudsman Service resolves complaints based on what they consider to be fair and reasonable in all the circumstances of the case. Because of this approach, there may be some complaints which are more likely to succeed via the Financial Ombudsman Service than through court.
One downside to the Financial Ombudsman Service process is that complaints in relation to certain businesses do not fall within their remit. Where a business does not meet the criteria for a complaint to be considered by the Financial Ombudsman Service, it may be that there is little other choice but to issue proceedings to advance the matter.
Is there a limit to the amount the Financial Ombudsman Service can award?
The Financial Ombudsman Service has confirmed that if a consumer has lost out financially, because of the wrongful actions of a company, they aim to put the consumer back in the position that they would have been in if the mistake had not taken place.
The Financial Conduct Authority (“FCA”) sets the maximum amount which can be awarded by the Financial Ombudsman Service as compensation for loss or damage. The amount which can be awarded is reconsidered by the FCA each year and is adjusted in line with inflation.
As from 1 April 2023, the Financial Ombudsman Service are able to award:
- Up to £415,000 for complaints about activities on or after 1 April 2019; or
- Up to £190,000 for complaints about activities before 1 April 2019
Decisions up to and including the above limits are binding on businesses, and they must therefore make payment when the Financial Ombudsman Service find in favour of a consumer and the decision is accepted. Whilst the Financial Ombudsman Service can suggest that a business makes a larger award than the amounts detailed above, they cannot make them pay anything over the limit and it is up to the company whether they decide to pay any extra or not.
When can you make a complaint to the Financial Ombudsman Service?
As above, the Financial Ombudsman Service can consider a variety of different types of disputes, but there are several requirements which must be met before they can consider a complaint. You will usually be required to follow a company’s complaints procedure, and obtain a ‘Final Response’ to the complaint before you can refer a matter to the Financial Ombudsman Service. If a company does not respond to your complaint within 8 weeks, then this will also usually entitle you to make a complaint to the Financial Ombudsman Service.
There are strict timescales for referring a complaint to the Financial Ombudsman Service. The Financial Ombudsman Service can only consider complaints if the Final Response from the company you are complaining about was received within the last 6 months for most complaints, or up to 15 months for some. Unfortunately, if this deadline is missed, unless there are extenuating circumstances where it can be shown that a complaint could not be made sooner, the Financial Ombudsman Service will not be able to consider a complaint.
Do you need a solicitor to make a complaint to the Financial Ombudsman Service?
Whilst you do not strictly need a solicitor to make a complaint to the FOS, consumers only get one opportunity at making a complaint to the FOS. It is therefore important to ensure that a complaint is properly and fully articulated and framed in the strongest way possible, to maximise the chances of the FOS making an award in the consumer’s favour. It can therefore assist to be legally represented, and we have had lots of success for clients from complaints to the ombudsman.
For example, we recently obtained an excellent result for a client, where we assisted in recovering significant losses from NatWest by preparing a submission to the Financial Ombudsman Service.
How can Ellis Jones help?
Our specialist Banking and Finance Litigation team can advise and assist you in submitting a complaint to the Financial Ombudsman Service, or in making an initial complaint to a financial organisation if you are yet to complain.
If you would like to discuss a potential complaint to the Financial Ombudsman Service please do not hesitate to contact our Banking and Finance Litigation team by calling 01202 525333 or by email at banking@ellisjones.co.uk.
About the authors
Leah is a Trainee Solicitor in our Banking & Finance Litigation team and is based in the Bournemouth office. Leah has expertise in dealing with Financial Ombudsman Service (FOS) complaints and has handled a range of Banking & Finance and Gambling disputes.
Paul is a Partner and Solicitor in our Dispute Resolution department and is based in our Bournemouth office. Paul has a wide range of expertise that spans across Banking & Finance, Betting, Gambling & Gaming, Commercial Disputes and Intellectual Property.
How can we help?
When you submit this form an email will be sent to the relevant department who will contact you within 48 hours. If you require urgent advice please call 01202 525333.
