We’re an informal alternative to the courts and we decide cases on a fair and reasonable basis.
How we reach decisions
We have a duty to resolve complaints based on what we think is fair and reasonable in all the 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. And, the decision we come to on what is fair and reasonable in all the circumstances of the case may be different to what a court would decide applying legal rules.
If you're a consumer, you don't have to accept what we say about your complaint, and you can withdraw from our process at any stage. However, if you do choose to withdraw from our process you are unlikely to be able to revive your complaint with the Financial Ombudsman Service.
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.
In most cases, a case handler will initially provide their assessment of the complaint. To do this, they will review everything you and the business have said and the paperwork that has been provided. They will then share their assessment of the complaint with both sides and recommend how it could be resolved.
The case handler's assessment will explain the reasons behind their conclusion and the recommendation they have made to resolve the complaint. Both you and the business will be given a reasonable time in which to confirm whether you agree or disagree with what the case handler has recommended.
At this point, if both you and the business agree with what they've said, the complaint is settled. Most of the cases we see are resolved at this stage.
You may be asked to confirm that you are accepting any compensation recommended by the case handler in full and final settlement of your complaint. Accepting any compensation may mean you won't be able to the pursue the business in court for the same complaint. You may want to consider taking independent legal advice if you are unsure about accepting.
If you don't agree with the case handler's assessment, you need to tell them your concern as soon as possible. The case handler will consider anything further you have to say, and this may change their assessment, or it might stay the same – they will tell you either way.
Final binding decisions
If you or the business don't accept the case handler's assessment, you can ask for your case to be referred to an ombudsman.
The ombudsman will then look at all details of your complaint afresh, and make a final decision. As part of this process the ombudsman may decide to issue a provisional decision which will set out the decision he/she is minded to make on your case. The ombudsman will then give both parties a reasonable time in which to make any final representations on your case. After this time the ombudsman will consider any further submissions he/she receives before issuing a final decision on your case.
The ombudsman will issue their final decision to both parties in writing. You will then be asked to confirm by a specified date whether you accept or reject it. If you accept the ombudsman's final decision in the specified timeframe, the business has to do what the ombudsman has told them to do – it will be binding on the business. This might, for example, include making the business pay you compensation. And, if you accept the final decision, it is unlikely you will be able to pursue the business in court for the same complaint.
If you don't want to accept the ombudsman's decision, you don't have to. But it does mean our involvement has come to an end and the business doesn't need to do anything. You may still be able to take legal action against the business, but we won't be involved in this. And, if we don't hear from you within the specified timeframe, then in most cases you will be treated as having rejected the decision and it will not be binding on the business.
If either side is unhappy with the decision, they can't appeal an ombudsman's final 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 rules are flexible and there might be some cases where after a provisional decision has been issued, the parties may agree to settle the complaint at that stage, sometimes on the basis proposed in the provisional decision or otherwise. If you agree to compensation offered by a business at any stage, this may mean you won't be able to pursue the business in court for the same complaint. You may want to consider taking independent legal advice if you are unsure about agreeing to a settlement.
Our knowledge and experience
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.
How 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 says we should try to give an answer on cases within 90 days.
Sometimes, a case handler may be able to give you an answer quicker than this. And, if both sides agree to a case handler's assessment and recommendations, we can often resolve a case in a few weeks.
If the case can't be solved resolved by a case handler, 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 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.
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.
Who we’ve helped
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.