Before contacting the Financial Ombudsman
Before contacting the Financial Ombudsman Service (FOS) you'll need to go through the internal complaints procedure of the financial provider that you’re complaining about.
If the provider hasn’t resolved your complaint within eight weeks, or has rejected it, you can take it to the FOS.
The Financial Ombudsman Service is free for consumers to use and details of the ombudsman should be listed in your provider's final letter.
In some cases you will be directed to another ombudsman service, such as the Pensions Ombudsman, which deals with issues around the administration of complaints - but the Financial Ombudsman will be able to point you in the right direction.
How the Financial Ombudsman works
The FOS was originally set up to provide a speedy and cheap way to resolve disputes between financial companies and their customers without having to go to court.
Anyone who has reached deadlock in a dispute with a bank, insurance company or other financial provider, can apply for independent arbitration.
The provider is bound by the FOS's findings and from 1 April, the amount it has to pay for complaints has increased to £550 (£900 for PPI cases), for every complaint.
The FOS handles complaints about most bank accounts, investment products, mortgages, loans, some pension products, PPI claims, insurance policies, credit and store cards, HP agreements and financial advice.
What is an Ombudsman?
For more information on what an Ombudsman is and how it can help you, watch this short video from the Financial Ombudsman.
Typical financial complaints
Typical complaints can include being turned down for an insurance payment unfairly, being sold a financial product without understand risks involved and charges being applied to financial services incorrectly.
You can also complain to the FOS if you've been a victim of credit or debit card fraud and your bank refuses to reimburse you the money that has been taken from your account.
If you wish to complain to the Financial Ombudsman about a bank dispute, you can use our template letter to help.
How the Financial Ombudsman handles complaints
Any complaints that are received have to be considered. But not all financial complaints can be dealt with by the ombudsman, and it can be frustrating if it has to return a complaint rather than take it forward.
The ombudsman may not be able to help in the following situations:
- if your financial complaint is solely about the way an investment has performed, rather than if you weren't aware of the risks involved
- if the business you want to complain about isn't regulated
- if your case has already been considered by the courts
- if you're making a complaint on behalf of a business that has an annual turnover of more than €2 million, or a business that has more that ten staff members
Financial Ombudsman decisions
An adjudicator will investigate your complaint and reach an opinion based on all of the information.
If either party is unhappy with the decision, it can ask for an Ombudsman to consider the complaint. An Ombudsman will consider the complaint afresh and reach his or her own opinion.
If you accept the Ombudsman's decision, it's legally binding on both you and the business.
If you do not accept it, then it is not binding and you are free to pursue the matter further through the courts.
Going to court
If you're dissatisfied with a FOS decision, you can consider court action. But this can prove costly so get legal advice on whether it might be a realistic option.
Its also worth seriously considering whether a judge is likely to rule any differently than the Financial Ombudsman Service ruling.
It will be most costly if your claim exceeds a certain level, as you'll have to use the civil court and not the small claims court. The small claims court limits are £5,000 in England and Wales, £2,000 in Northern Ireland or £3,000 in Scotland.
If the value of the claim exceeds these limits, you'll need a solicitor, and a barrister for complex cases – and court costs can be high.
If you lose, you may have to pick up the other side's costs too.
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