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What is the Financial Ombudsman Service and what does it do?

If you’re lucky, you won’t need assistance from the Financial Ombudsman Service (FOS).

But if anything goes wrong with any finance products, or you were scammed and disappointed by your bank’s response, the FOS can help protect your rights and money. 

The risk of losing money can be incredibly stressful.

The Financial Ombudsman Service can help you settle disputes with financial services companies and, in some cases, help you receive compensation.  

Here’s everything you need to know about the FOS.

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What is the Financial Ombudsman Service?

The Financial Ombudsman Service (FOS) is an independent body that resolves disputes between people and financial services firms.  

It is free to contact the FOS, who has the power to order firms to pay compensation to settle disputes. 

The FOS deals with various financial services and products, including: 

  • Bank accounts 

  • Credit cards 

  • Debt collection 

  • Irresponsible lenders 

  • Insurance 

  • Investments 

  • Loans 

  • Mortgages 

  • Pensions 

  • Savings accounts 

The Financial Ombudsman also may be able to help if you’ve been scammed and are not satisfied with your bank’s response. 

If you have an issue, the first port of call should be with the provider who sold you the product. And if you’re unsatisfied with the resolution, you can contact the FOS to help, and they’ll act as a mediator. 

The Ombudsman will investigate your complaint with the company in question and make a decision regarding any resolution or compensation. 

It’s worth noting there is a cut-off point for complaints. The FOS says you need to complain to the company and escalate your issue to the Ombudsman within six years of the original issue taking place. 

However, if a delay was due to exceptional circumstances, they might still be able to help. 

How do you make a claim?

First, you must go through the complaints process with the company you’re unhappy with. 

You can’t go to the FOS until you’ve complained and received a final response from them. If the company’s response is unsatisfactory, you can then get in touch with the FOS. 

 You’ll have to fill out a form on their website. 

They’ll ask for the following information: 

  • The name of the financial firm you're complaining about 

  • Dates of correspondence with the business, including the date of its final response 

  • Your account or policy details 

The FOS says after they receive this information, they’ll get back to you within 10 working days. They’ll assign you a case handler who you can get in touch with any updates. 

The Ombudsman will then talk to the company. Depending on the complaint, the FOS will give the business between 15 days (for complaints about payment services or electronic money) and eight weeks to respond.  

The firm should send its final response directly to you. If you’re unsatisfied with the business’s final response, you have six months from receiving it to refer it back to the FOS. 

Sometimes when the Financial Ombudsman approaches a company and informs them that they have been asked to investigate a complaint, the company will settle quickly to avoid a full investigation. 

If the company holds its ground, the Ombudsman will make a final decision that is legally binding. They’ll evaluate all the information and decide whether you’ve been treated fairly. 

According to the FOS, they’ll keep in touch with you throughout the process, but how long will this take? 

The average length of an investigation is around 90 days, but it can vary.  

To recap, here are all the steps of the Financial Ombudsman’s process: 

1. Complain to the company about your issue. 

2. Get a final response from them. 

3. Fill out the Financial Ombudsman’s form. 

4. The Ombudsman will investigate the company. At this point, the company could contact you to settle the dispute and end the process. 

5. The FOS will evaluate both sides of the dispute and decide on an appropriate resolution in the form of financial compensation or another settlement. 

6. If you are unhappy with the Ombudsman’s decision, you can escalate the issue further. 

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What resolution can the Financial Ombudsman offer?

If the FOS upholds your complaint, they will decide what an acceptable resolution is. 

They have the authority to order the company to pay you compensation if they agree you’ve lost out financially because of the company’s mistake or think you’ve been inconvenienced due to their actions. 

In other circumstances, the FOS can seek alternative forms of retribution, for example, if your insurance policy was wrongfully cancelled, they can make the provider reinstate it. 

What if I’m not satisfied with the Ombudsman’s decision?

While the FOS aims to be a fair and impartial third party, if you are unsatisfied with their dispute resolution, you can escalate the dispute. 

The FOS has an internal complaints system, so at any point while they’re handling your case, you can raise issues with your case handler, or request to speak to a manager.  

However, if this doesn’t work, you can contact the Independent Assessor for the FOS. 

If you’re raising an issue with the Independent Assessor, it must be after going through the Ombudsman’s internal complaints procedure first and within one month of your case being closed.

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About the author
Our team of writers, who have decades of experience writing about personal finance, including investing, retirement and pensions, are here to help you find out what you must know about life’s biggest financial decisions.