The FOS is an independent body with responsibility for deciding on complaints against firms that provide financial products and services. The highest amount the ombudsman can award went up this year to £445,000, a substantial increase from the £150,000 limit before April 2019.
The FOS received 141,846 new complaints between July 1 and Dec. 31, 2024, and upheld 33 percent of complaints in favor of the consumer. It does not hold data on how much compensation it has ordered businesses to pay.
City firms argue that some decisions, especially relating to compensation for consumers mis-sold motor finance, have led to the ombudsman becoming a “quasi-regulator” as it sometimes rules against firms even if they followed FCA regulations.
The government thinking could still change, but if finalized it would be included among other proposals to modernize the U.K. redress system at Chancellor Rachel Reeves’ Mansion House speech on July 15, and would essentially hand the final call on compensation decisions to the City watchdog.
Currently, the ombudsman’s decision is final, and firms can only appeal through a costly judicial review.
Banks and financial firms have been calling for the weakening of the FOS’ powers, including reducing the six-year time limit for complaints, and amending its legislative obligation to resolve complaints based on what is “fair and reasonable” in all the circumstances of the case.
