How to complain about a financial service

This article outlines the process for UK 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, they can escalate complaints 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 or make a decision within eight weeks, or the customer isn’t happy with the decision, they may be able to complain to the FOS which can help individuals, charities and some businesses. It publishes guidance about who is eligible to use its service, and an eligibility checker for businesses.

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. They can also hire a claims management company to manage their complaint for then. However, the FOS charges claims management companies for cases they bring to the FOS and representatives may then deduct these fees from any compensation awarded by the FOS to a complainant.

What can the FOS deal with?

The FOS can deal with complaints about financial services which are regulated by the FCA, with some exceptions. The FOS outlines what it can and what it can’t deal with on its website.

The FOS might not be able to take on a complaint because:

• It has already looked into the complaint.
• The complaint wasn’t made within six months of receiving a reply from the company.
• The complaint wasn’t made within six years of the event being claimed about, or within three years of the customer being aware they had cause to complain (with exceptions).
• The FOS decides the complaint would better be dealt with by a court, or there is court action ongoing.
• The complaint should be dealt with by a different organisation, such as by a different Ombudsman.

Some pensions issues are covered by the Pensions Ombudsman (TPO) instead of the FOS. 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 action could involve the FOS telling the financial service to pay compensation. The FOS has published guidance on what to expect in compensation on its website.

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

The FOS has also published information on what complainants can expect from its service and some of the factors the FOS might consider when reaching its decision on a case.

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 taking legal action in the courts against their financial service provider.

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

If the customer already accepted the FOS’s final decision, it is unlikely they will be able to take the same complaint to court.

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.