How to complain about a financial service

This article outlines the process for individuals, small businesses and charities to complain about regulated financial service providers, including banks, insurers and investment firms.

Customers should first complain to their provider. However, if this does not sort out the dispute, complaints can be escalated to the Financial Ombudsman Service (FOS).

Complaints that don’t follow each step of this process are likely to be rejected.

Complain to the provider

Many complaints can be resolved by discussing the matter with the relevant company.

If that doesn’t resolve the situation, the next step is to follow the company’s complaints procedure.

Firms regulated by the Financial Conduct Authority (FCA) have to manage complaints according to specific rules. This means complainants should expect the company to send a prompt acknowledgement of a complaint, keep complainants informed about the progress of the complaint, and make a final decision on the matter within eight weeks.

What if that doesn’t resolve the matter?

If the company doesn’t reply within eight weeks or the customer isn’t happy with the reply, customers may complain to the FOS which can help individuals, charities and some businesses. It publishes guidance about who is eligible to use its service.

The FOS explains how to refer a complaint on its website. It also has free helplines which may be useful for people wishing to informally discuss their issue before formally referring a complaint:

• 0800 023 4567 for individuals
• 0800 032 8000 for businesses, charities and trusts

Individuals can use the FOS free of charge. However, if they use a professional representative to manage a complaint on their behalf, the FOS will charge the representative a fee. Representatives may then deduct fees from any compensation awarded by the FOS to a complainant.

What can the FOS deal with?

Activities that are regulated by the FCA are covered, with some caveats. The FOS outlines what it can and what it can’t deal with on its website.

Reasons which may prevent the FOS from looking into a complaint include:

• The FOS has already looked into the complaint.
• The complaint wasn’t made within six months of receiving the reply from the company. The FOS can generally only look into complaints made within six years of the event being claimed about, or within three years of the customer being aware they had cause to complain.
• The FOS decides the complaint would better be dealt with by a court, or there is court action ongoing.

Some pensions issues are covered by the Pensions Ombudsman (TPO) instead. See the Commons Library briefing Pension FAQs: Occupational and personal pensions for more information.

Firms and services based outside the UK are not generally covered by the FOS. Customers may however sometimes be covered by similar schemes operating in other countries. A list of such schemes is published by the International Network of Financial Services Ombudsman Schemes.

How does the FOS deal with complaints?

In most cases a FOS case handler will first provide an assessment of a complaint and may recommend compensation.

Both sides have the right to reject the case handler’s recommendation and to ask for it to be reviewed. The case will then be passed to a FOS ombudsman who will consider the case again and issue a ‘final binding decision’.

If the complainant accepts the final decision, it becomes legally binding for both parties, meaning the company complained about will have to take whatever action the FOS recommended.

The FOS has a database of earlier cases and decisions which can be used to get an insight into its approach.

What if I’m not happy with the ombudsman’s final binding decision?

The FOS offers no right of appeal against the final binding decision. But if the customer is unhappy with the decision they may choose not to accept it and follow other routes, such as via the courts.

More information on accessing legal advice is available in the Commons Library research briefing Legal help: Where to go and how to pay.

They may also consider taking the case to court for a judicial review, though this would focus on the FOS’s process, rather than the facts and evidence of the dispute itself.

Some complainants allege that the FOS’s decision in their case was made on the basis of misleading or untruthful evidence supplied by the firm. The FOS has said that if it was made aware of compelling evidence of this, it would invite the firm to change its position or mediate and, if the firm refused, allow a new complaint from the complainant.

If a complainant is not happy with the service they received from the FOS, they can follow the FOS’s internal process which culminates in an Independent Assessor reviewing how the FOS handled the case. However, this complaints process will not re-examine the outcome of the case, but rather the FOS’s process and service.

Disclaimer​

The Commons Library does not intend the information in this article to address the specific circumstances of any particular individual. We have published it to support the work of MPs. You should not rely upon it as legal or professional advice, or as a substitute for it. We do not accept any liability whatsoever for any errors, omissions or misstatements contained herein. You should consult a suitably qualified professional if you require specific advice or information. Read our briefing for information about sources of legal advice and help.​