How we make decisions

We have a duty to resolve complaints 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 our service, you don'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 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.

If a case is formally referred to an ombudsman, they'll review all the facts and evidence before reaching a final decision based on what's fair and reasonable in all circumstances of the case. They will then put their 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, before the final decision is issued. 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 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, investigators 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.

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.

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 says 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, we can often settle a case in 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 affected by something outside our control, like a court case.

If we think a case will take longer than 90 days, we’ll write to the customer and business to let them know how long it will take.

If a consumer has lost out financially, we’ll aim to put them back in the position they would have been 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  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.

You can read case studies about people who have complained to us and how we helped settle their disputes.

You can also read about cases where the ombudsman has issued a final decision in our database of decisions.