Financial Ombudsman Service (FOS)

Financial Ombudsman Service (FOS)

The FOS replaced the following services, and was set up under section 225 of the FSMA 2000.

• The Insurance Ombudsman;
• The Banking Ombudsman;
• The Building Society Ombudsman;
• The Investment Ombudsman; and
• The PIA Ombudsman.

It is there to deal with all complaints from eligible complainants in respect of complaints against authorised persons in respect of regulated activities from UK offices.   The complaint first has to go through the authorised persons own complaints system and then when that is finished and the complainant is advised of the outcome and then told that they can go to the FOS if they are still unsatisfied.

The FOS is run by a panel of Ombudsmen and it not liable for its actions unless there is bad faith or a breach of the human rights act 1998.

The eligible complainant must refer to complaint to the FOS within six months after the firm’s final response and within six years after the event complained about or three years after the complainant had knowledge that he had a complaint if that was later than the six years.

An eligible complainant is,

• A private individual;
• A business with an annual turnover of less than £1 million;
• A charity with an annual income of less than £1 million; or
• A trust with a net asset value of less than £1 million.

The FOS can request parties to the complaint to produce all necessary documentation and information and failure to do so can be treated as contempt of court.

The FOS considers all aspects of the complaint, the applicable law, what is reasonable, the FSA rules and then they write to the parties with their decision and reasoning. If the complainant accepts the decision then it is binding on both parties, if they do not then they are free to take what ever legal remedy is open to them.

The FOS can award compensation which the respondent must accept if the complainant accepts the FOS decision. The maximum monetary award plus claimants costs is £100,000 plus when appropriate an award for pain suffering, damage to reputation, distress or inconvenience. The FOS can recommend a higher award but this is then not binding on the respondent.

The FOS jurisdiction is obligatory for authorised firms but they also run a voluntary system open to certain areas.

The FOS also takes into account non regulated areas such as unsecured lending, paying in money by plastic card and ancillary banking services.

The FOS is funded by a general levy on authorised firms plus a charge per case.