Financial Ombudsman Service to start charging claims firms – but you can still complain yourself for free

Between April and December 2024, professional representatives were behind almost half (47%) of the cases sent to the FOS. Yet only around a quarter (26%) of cases brought by these representatives were successful, compared to over a third (38%) of those brought directly by consumers, according to the latest figures.

The FOS said the new charges would make its funding arrangements "fairer" and incentivise claims firms to "submit better-evidenced complaints".

At MoneySavingExpert.com, we've always encouraged you to try to resolve issues yourself for free and we've often provided template letters and tools to help with this.

Claims firms will be charged up to £250 per complaint

From 1 April 2025, professional representatives will be limited to 10 free cases each financial year.

After that, they'll be charged £250 for every subsequent case they take to the FOS. However, if the complaint is successful, they'll get back £175 in credit (effectively reducing the charge to £75).

Charities, family members and friends helping you bring a complaint will still be able to do this for free, as they'll be excluded from the charges.

Under the new rules, financial services providers will also get a discount on case fees paid to the FOS if a complaint brought against them by a claims firm subsequently fails – they'll pay £475 instead of £650.

The changes could lead to shorter wait times

James Dipple-Johnstone, interim chief ombudsman at the FOS, said: "Currently there is little commercial incentive for representatives to ensure the complaints they bring are well-founded or have merit. As a not-for-profit service, we expend our finite resources handling thousands of withdrawn or abandoned cases, which can lead to longer wait times for other customers.

"The charges we are introducing from April will bring better balance to our fee model, helping us to resolve disputes quickly and ensuring a wider contribution towards our running costs."

It comes as we await the outcome of a separate consultation launched last year, looking at how the complaints system can be "modernised" to reduce the number of cases going to the FOS and "ensure better outcomes for consumers, firms and the market".

You can still escalate complaints yourself for FREE

The Financial Ombudsman covers a huge range of areas, including bank accounts, credit cards, debt collection, mortgages and loans, pensions and savings. Here's how to make a complaint:

• You MUST complain directly to the company in the first instance. It has eight weeks to consider your complaint and give you its "final response".

• Once the company has given its final response, or eight weeks has passed since your initial complaint, you can complain to the FOS. The best way to complain is via its online form. It has a "complaints checker" where you answer some initial questions about your complaint, then it'll take you to the relevant form.
  
  However, you can also give the details of your complaint over the phone, or request a form to be sent to you, by ringing 0800 023 4567 between 8am and 5pm, Monday to Friday.

• You won't get a judgement from FOS right away. Disputes that go all the way can take three to nine months.

• Already made a complaint? Have your reference number handy if you want to chase a complaint. If you're after an update on an existing case, send an email quoting your case reference number or try its dedicated contact page.