Overview
The Financial Ombudsman Service can deal with complaints from consumers about most financial matters including, for example: banking, insurance, mortgages, pensions, savings and investments, credit cards and store cards, loans and credit, hire purchase and pawnbroking, financial advice, stocks, shares, unit trusts, and bonds. From November 2009 money-transfer operators also came under the ombudsman's remit. Before the ombudsman can step in, the consumer must first give the business they are unhappy with the opportunity to look into the complaint itself – before the ombudsman service can make a decision on the dispute. The business has a maximum of 8 weeks to resolve the complaint. If they do not resolve it within 8 weeks or the consumer is not happy with the response then they can refer the complaint to the ombudsman service. The ombudsman has the authority to request or require a company to offer financial compensation, correct a consumer's credit file, or offer an apology, as a means of dispute resolution.Processes
The ombudsman makes decisions on the basis of what it believes is fair and reasonable in the particular circumstances of each case. In making decisions on individual complaints, the law requires the ombudsman to take into account: relevant law and regulations; regulator's rules, guidance and standards; codes of practice; and (where appropriate) what he/she considers to have been good industry practice at the relevant time.Funding
The Financial Ombudsman Service is funded by the UK'sImpartiality
The Financial Ombudsman Service publishes the proportion of complaints it upholds in favour of consumers. Across all complaints in 2013/2014 the ombudsman found 58% in favour of consumers. The ombudsman was set up by parliament to be an impartial and independent body, though its decisions can be criticised by the side that loses. Independent commentators acknowledge that the ombudsman service is a valuable free service for consumers – although those who feel they have "lost" a complaint might understandably feel let down and want to question the ombudsman's impartiality. Some consumers have questioned the amount of redress awarded by the ombudsman while many businesses expect the ombudsman to apply the compensation cap rigidly and lobbied against the increase (in January 2012) from £100,000 to £150,000 in the maximum compensation the ombudsman can tell a business to pay. Various websites have been set up to complain about the Financial Ombudsman's partiality – usually by people who disagree with particular ombudsman decisions.Complaints-handling performance of individual financial companies
Since September 2009 the Financial Ombudsman Service has been publishing complaints data on its website every six months about named individual businesses. The data provided relates to businesses which have 30 or more new cases, or 30 or more resolved cases, in each six-month period. The data shows the number of new complaints, and the proportion of complaints upheld in favour of consumers. The complaints data shows that: * just under 200 businesses (out of more than 100,000 covered by the ombudsman service) together generate around 90% of the complaints workload, * the number of complaints relating to each individual business ranges from 30 to over 45,000, * the proportion of cases upheld in favour of the consumer varies substantially from business to business – between 3% and 100%.Budget and staffing levels
The entire ombudsman staff in 2007 (including substantial number of ancillary staff) was 960. They managed to handle 627,814 initial enquiries and close 111,673 cases which had been sent to for adjudication. The BBC reported in September 2007 that the ombudsman planned to reduce staff numbers to 600, reflecting the decline in mortgage endowment complaints. By December 2009 ombudsman staff had increased to over 1,000 – reflecting a substantially increased workload of 200,000 cases. Currently there are 4,500 people working at the ombudsman – reflecting a substantially increased workload of over half a million cases last year (2014/2015). Staffing levels at the Financial Ombudsman Service fluctuate – as does the budget year-on-year – to match the volume of disputes it is dealing with. The number of staff required – and forecasts for complaints volumes and workload – are consulted on publicly each year in the ombudsman's corporate plan and budget.Status of Ombudsman decisions
Around 90% of the disputes that the Financial Ombudsman Service resolves are settled at earlier informal stages, without the intervention of an ombudsman. An ombudsman's decision is the final stage of the Financial Ombudsman Service's process. If the consumer with the complaint ''accepts'' a final decision, it is binding on both parties and enforceable in court. But if the consumer chooses ''not'' to accept an ombudsman's decision, their legal rights remain unaffected and they can take the matter to court instead – subject to any requirements set by the courts. However, independent commentators generally recommend that consumers should use the ombudsman service rather than the courts as the outcome of court cases can be unexpected, disappointing and costly. However, there have been judicial reviews against the ombudsman, brought by financial services companies who have to accept the ombudsman's decisions which are binding in law. For example, in January 2011 the British Bankers Association – on behalf of a number of high-street banks – brought a judicial review against the ombudsman and the FSA on the approach to PPI complaints handling. The High Court rejected the banks' challenge and endorsed the approach taken by the ombudsman and the FSA. The difficulty in winning a judicial review is that theAccountability
The board of the Financial Ombudsman Service is appointed by theTriennial reviews
The non-executive board of the Financial Ombudsman Service commissions three-yearly external reviews of the service.Chief ombudsmen
* Walter Merricks, 2000–2009 * Natalie Ceeney, 2010–2013 ** Tony Boorman (interim), 2014 * Caroline Wayman, 2014–2021 ** Nausicaa Delfas (interim), 2021–2022 * Abby Thomas, 2022 to 6 February 2025 ** James Dipple-Johnstone (interim)Criticism
* Employees have left overwhelmingly negative reviews on Glassdoor (with an average rating of 1.9 out of 5), blaming a decline in quality on recent (2016–2019) changes in the way the organisation is structured, although since then the rating has steadily improved. * Timeliness – In the years since the ombudsman service was created, some consumers, businesses and commentators have suggested that the ombudsman takes too long to look at some complaints. In previous years, the ombudsman has seen complaints about some topical financial matters take longer to resolve than others (notably, mortgage endowments and payment protection insurance (PPI) due to the sheer volume of complaints received by the service. The ombudsman's published annual review (2012/2013) showed 58% of all disputes were sorted out within six months – and 43% of non- PPI cases within three months. * Questions as to their impartiality due to the manner in which they are funded by the financial services, and that many employees have worked for financial services firms, mostly as solicitors who make up 38% of their brethren. Though the ombudsman service currently upholds over 49% of complaints in favour of the consumer, there have been complaints that the awards are inadequate. *As an ombudsman's decision is the final stage in the service's process, consumers who remain unhappy would need to pursue their complaint through the court. (However no alternative has been suggested.) * Lack of fifteen-year long-stop: There is no fifteen-year "long-stop" rule in the complaints-handling rules made under the Financial Services and Markets Act. In its policy statement published in January 2003 – and following subsequent reviews – the Financial Services Authority (FSA) set out why there is no fifteen-year limitation period in the complaints-handling rules, stating: "We do not consider it is in the interests of consumers to rule out the possibility of complaints being dealt with outside the 15-year period that would apply to court cases. Nor do we consider this necessary to prevent hardship to firms." * ''Dispatches'' shown on Channel 4 went under cover at the FOS in 2017 and uncovered a number of issues. These included junior staff saying that they googled cases for answers, never told lenders to write off debts and general mishandling of cases. MPs called for a national inquiry into its work. An independent investigation in 2018 found that the FOS "is performing at a level consistent with its publicly stated objectives." * In October 2024, researchers at Warwick University stated that they had uncovered “some very concerning practices” at the Financial Ombudsman Service (FOS) relating to how it handles complaints. The FOS website says that, in 2023-24, across all products, it upheld 37% of the complaints it was asked to resolve. Researchers claimed their analysis suggests that, rather than the advertised 37% figure, the “genuine” rate for upheld cases for 2023-24 was 24%, and considerably lower than that for some individual ombudsmen.International Network of Financial Services Ombudsman Schemes
The UK Financial Ombudsman Service is a member of the International Network of Financial Services Ombudsman Schemes, a global association whose members operate as out-of-court dispute resolution mechanisms in the financial sector. Other members include: * Financial Ombudsman Service (Australia) * Ombudsman for Banking Services and Investments (Canada) * Financial Services Ombudsman's Bureau of Ireland * Ombudsman for Banking Services (South Africa) A list of all members can be found at the International Network'References
External links
{{Portal, Banks