Financial Ombudsman Service Award Limits to Increase

The FCA has announced an increase in the Financial Ombudsman Service’s award limit.

The regulator has published a policy statement which confirms changes which were proposed following a consultation in October 2018. These new rules increase the ombudsman’s award limit to:

  • £350,000 for complaints about acts or omissions by firms which took place on or after 1 April 2019
  • £160,000 for complaints about acts or omissions by firms which took place before 1 April 2019 and which are referred to the ombudsman service on or after 1 April 2019

Both award limits above are to be automatically adjusted each year in line with inflation.

The award limit for any complaints referred to FOS before 1 April 2019 will remain at £150,000.

The FCA is advising firms that are affected by the changes to:

  • update their consumer information about complaints handling procedures
  • ensure they are using the most up-to-date version of the ombudsman’s explanatory leaflet[1]
  • ensure that complaints handling staff are aware of the increased award limit

The implementation period is now relatively short, with firms expected to implement changes by 1 April 2019. The FCA has said that “this was so the change could come into force at the same time as the extension of the ombudsman service to larger small and medium-sized enterprises, which we considered a logical approach.” Following the consultation in October 2018, firms should already have been aware that a change to the limit was likely to occur on 1 April 2019.

 

[1] Leaflets can be ordered at: https://www.financial-ombudsman.org.uk/publications/leaflet_ordering.htm

About the author

Bruce has worked in financial services for the whole of his professional life, including 11 years as a Compliance Director of a US owned Independent Financial Advisory and Wealth Management business. At RWA, Bruce leads the Audit and Conduct Risk department from our Manchester office. He is RWA's lead consultant to the Guernsey Financial Services Commission (GFSC).

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