The Financial Ombudsman Service (FOS) has announced the next phase in a series of reforms that aim to streamline and modernise the complaints process.
This follows a joint consultation with the Financial Conduct Authority (FCA).
The reforms include an amendment to rules to provide greater clarity that the Financial Ombudsman’s decisions are based on the standards applicable at the time of the act or omission complained of and will not be applied retrospectively.
It says this will provide a foundation for proposed legislative changes to the ‘fair and reasonable’ remit which are currently progressing through Parliament.
In addition, it will introduce new powers to dismiss complaints that are not appropriate for the Financial Ombudsman and may be better resolved – or are already being investigated – in other ways.
These include complaints that may be better suited to court, law enforcement, or another dispute resolution process, or where there has been no financial loss, or material distress or inconvenience, effective 1 October 2026.
There will also be a new registration stage to be rolled out next year, following a consultation on differential case fees later this year.
It says by doing this, it will ensure that complaints referred to the service are within its scope and ready to be investigated before being allocated to a caseworker.
This will continue the service’s work to provide a fairer funding model to better reflect costs and support earlier resolution of disputes.
Financial Ombudsman Service chief ombudsman James Dipple-Johnstone says: “We are driving forward reforms to bring consistency and predictability to the redress system – helping to underpin confidence in financial services, ensuring major or emerging issues are escalated earlier, and supporting firms with better insight to help them address and resolve customer issues more effectively and proactively.”
“This is an important part of the wider package of reforms, and we will continue to work closely with the Government, the FCA, consumer groups and industry stakeholders on this significant transformation of the redress system and the way our service operates within it.”
