We're an informal alternative to the courts and we aim to make decisions fairly and reasonably.
How we reach decisions
We have a duty to make decisions based on what we think is fair and reasonable in all circumstances of the case.
We were set up as an informal and free alternative to the courts. To use us, you won’t need to make your case in person. And there’s no “cross-examination”, where both sides ask each other questions.
We’ll sort things out over the phone, by email or post – depending on what suits you.
Unlike a court, you generally don’t need anyone to represent you. If you’d prefer, we can talk to a member of your family, a friend or someone else who you’ve asked to help you complain.
Our powers are set out in Part XVI and Schedule 17 of the Financial Services and Markets Act 2000. We take into account the law, codes and good practice that applied at the time of the event. We also follow the rules set out in the Financial Conduct Authority's (FCA) handbook, although we’re operationally independent of the regulator.
We make decisions on the facts and evidence available in each case. Either side can tell us what they remember saying or being told. Written evidence or paperwork from the time is often very helpful. But if it isn’t available, it doesn’t mean we’ll automatically uphold or reject a complaint. The right outcome in one case may not be the right outcome in another as individual circumstances can vary so much.
When we receive a complaint, a case handler will review it and then share their initial thoughts with both sides.
They’ll explain which points are most relevant so that each side has a chance to raise new points or ask us to look again at certain points. If you don't agree with this initial assessment, you need tell the case handler your concerns as soon as possible.
If you’re still not happy with what the case handler thinks, you can ask an ombudsman to carry out a formal review of your case.
Initial assessments aren’t the same as final binding decisions. However, we’re able to resolve most complaints informally at this stage.
Final binding decisions
If a case is formally referred to an ombudsman, they’ll review all the facts and evidence. When they reach the end of a case, they make a decision based on what’s fair and reasonable and then put the decision in writing to both sides.
If you’re a consumer, you don’t have to accept the final decision, and you can withdraw from our process at any stage. And if you don't accept our decision, you can take the dispute to court instead, if you prefer.
The rules are different for financial businesses. If a consumer accepts our final decision, then the decision is legally binding on the financial business. It can’t simply withdraw from the process.
If either side is unhappy with the decision, they can’t appeal an ombudsman decision to another ombudsman. You also can’t go to court to appeal the ombudsman's decision just because you disagree with it.
However, we’re a public body and we can be judicially reviewed. A judicial review usually focuses on the process an ombudsman has used to make their decision, not on the facts and evidence of the dispute itself. You’d probably need to get legal advice before starting judicial review proceedings.
Our knowledge and experience
Case handlers and ombudsmen are appointed to settle disputes fairly and reasonably - they have a wide range of technical, academic and professional qualifications and experience. And while a financial background is useful, case handlers and ombudsmen are appointed to settle disputes because they have the ability to listen to all sides of the story and arrive at decisions fairly.
The way we work
As an alternative to the courts, we resolve things over the phone and in writing. We settle most of our cases informally in this way. We don't ask you to discuss your complaint face to face and we don’t usually need hearings to resolve a dispute.
You can read more about what to expect when you bring a complaint to us.
How long it takes
We aim to give answers to complaints within 90 days of receiving the complete complaint file.
This is in line with the EU directive on Alternative Dispute Resolution (ADR) which sets out that we should try to give an answer on cases within 90 days.
Sometimes, we may be quicker than this; if both sides agree to a case handler’s informal recommendations, then we can often settle a case within a few weeks.
If the case can’t be settled informally, then the process takes longer, as an ombudsman has to carry out a formal, detailed investigation.
Longer timescales for PPI claims and complex cases
Over 1.3 million people have asked for our help with PPI complaints. This is an unprecedented number of complaints for us to deal with and many are waiting longer than we’d like. We’re able to give some people an answer within 3 months, but for most, it's still likely to take us longer than 90 days to give an answer about a PPI complaint.
Other types of cases may also take longer than 90 days to resolve. For example, highly complex cases which are affected by something outside of our control, like a court case.
If we think a case will take longer than 90 days, we’ll write to both customer and business to let them know how long it will take.
The EU Alternative Dispute Resolution directive
The directive encourages organisations like us to give answers to complaints within 90 days of receiving the complete complaint file. In most cases (excluding PPI), we already give answers in less than 90 days.
The directive also introduced new rules around late complaints brought to us after the six month time limit.
Before, businesses only had to tell us if they objected to us looking into a late complaint when the complaint was referred to us. However they now have to state their position on this earlier, in their final response letters. If a business agrees to us looking at a late complaint in their final response letter, they can't change their mind later on.
We can also now look into a complaint before eight weeks have passed for the business to investigate it but only if the business and their customer agree.
There were other changes to simplify the rules around the types of complaint we’re able to dismiss. In those cases where we don't think we're the right organisation to help, we refer consumers on to organisations who can.
Some complaints aren’t covered by the ADR directive. For example, the complaints we receive from:
- micro-enterprises, charities and trusts
- some sectors like health and education
We've set out some more background information about our service and the ADR directive.
Time limits for complaining
There are time limits affecting whether we can or can’t help with a complaint.
A consumer needs to contact us within six months of receiving a business’s final response to their complaint. After six months, we won’t be able to help unless:
- the delay is due to exceptional circumstances
- the business agrees to us being involved
- the business didn’t tell the customer that they should contact us within six months
In addition, we normally can’t look at complaints relating to events that happened more than six years ago. In these cases, we can only help if you made your complaint within three years of becoming aware (or when you should reasonably have become aware) you had reason to complain.
If a consumer has lost out financially, we’ll look to put them back in the position they would be in if the financial business complained about hadn’t made a mistake.
We can ask a financial business to pay compensation, and we might decide they should also pay costs and interest on top of this.
There’s a limit to how much we can tell a business to pay. If we think that compensation should be higher than our award limit we can recommend that the financial business pays more. But we can’t make them pay anything over the limit. It is up to them whether they pay any extra or not.