The Financial Ombudsman Service (FOS) has announced the publication of a Policy Statement (containing final FCA Rules) that will make its funding arrangement fairer by proceeding with a proposal, which has been subject to two separate Consultations, to charge professional representatives £250 to refer a case to FOS from 1st April 2025.
Professional representatives were behind around 103,000 of the 220,000 complaints FOS received between April and December 2024- some 47%.
Following the proposed funding arrangement, professional representatives will receive £175 back if the case outcome is in favour of the consumer, and it will remain free for consumers to refer a complaint themselves, and for charities, families and friends who may be helping them.
Furthermore, professional representatives will be able to bring ten cases to FOS for free each financial year, after which every subsequent case they refer will be chargeable.
If a complaint referred by a professional representative is not upheld or is withdrawn, the financial business against whom the complaint was made will pay a reduced case fee of £475, instead of £650.
According to the FOS, the move aims to make the funding arrangements fairer and to encourage professional representatives to submit better-evidenced complaints and more diligently consider their merits before referring them.
Only 26% of cases brought by professional representatives were found in favour of the consumer, compared to 38% of those brought directly by consumers for free.
The professional status of these firms should mean that these complaints have a considerably higher success rate, compared to consumers who use the service without professional representation.
The fee is part of a wider range of measures being brought in to encourage firms to submit well-evidenced complaints. In summary, FOS has decided that it will charge CMCs where the complaint:
About the author
Rebecca Matyear
Rebecca recently joined us in 2024 as a Senior Content Writer and has experience researching and creating multimedia content. With a keen interest in current and emerging industry affairs, Rebecca responds through a critical lens and, by promoting thought and discussion, aims to increase awareness of UKGI’s work.
