What is the Financial Ombudsman Service and how can it help me?

If you are unlucky enough to have a dispute with a financial service provider, the Financial Ombudsman Service (FOS) is there to help. The FOS is an independent organisation in the UK that was set up by Parliament in 2001. It serves as a mediator to address complaints and issues related to financial products and services. The FCA charges a fee to every financial services company. These fees and levies fund the FOS. Which deals with over 1 million cases a year, from small businesses and consumers each year.

Most common complaints?

To make a complaint, fill out a form on their website. The FOS deals with various products and financial services, including: 

• Banking and credit cards
• Mortgages
• Investment and pensions
• Insurance
• Payment protection insurance
• Claims management companies
• Funeral plans

 

During 2021/2022, the FOS dealt with 108,065 complaints regarding banking and credit card companies. Current accounts came in first in terms of the most complained-about subject.

The second-biggest area was insurance, with 38,496 complaints. The most complained-about products were car and motorcycle insurance.

Investments and pensions have 16,279 complaints, and this is the third most significant area for complaints.

How does the FOS reach a decision?

The FOS states, "We're an informal alternative to the courts, and we decide cases fairly and reasonably."

All cases submitted are dealt with over the phone, by email, or by post.

There is no requirement to make a case in person, and there is no "cross-examination" in which both sides ask each other questions. 

The FOS will make decisions based on the facts and evidence available in each case. Each party will say what they remember.

Initial assessment and the Financial Ombudsman

In most cases, a case handler will initially assess the complaint and reach a decision. The case is settled when both parties have agreed.

If any party does not agree with the decision, you can request that your case be referred to an ombudsman. 

The ombudsman will then look at the complaint and make a final decision. 

The FOS aims to complete an answer to a complaint within 90 days. However, if both sides agree to a case handler assessment and advice. Then, the FOS can resolve a complaint within a few weeks. 

Compensation

If you have lost out financially, the FOS aims to put you back in. They try to correct themselves by giving extra if you feel it has been an inconvenience.

The FOS will ask the financial business to compensate you, including in terms of costs and interest. They have the power to order compensation.

In other circumstances, the FOS can offer alternative forms of compensation. For example, if you feel like your insurance policy was wrongfully cancelled. They can force the provider to reinstate it. 

The FOS also works closely with the FCA and the Financial Services Compensation Scheme.