Financial Ombudsman – your rights

What is the Financial Ombudsman Service?

If you've ever had a financial product or service, you need to know about the powerful rights all consumers have when dealing with financial companies. Regulations state these companies must "treat customers fairly". If they don't, you can go to the Financial Ombudsman Service to take a look at your case and get an independent decision based on the facts.

The Financial Ombudsman Service (FOS) is an official body, established by Parliament. It settles disputes between UK-based regulated financial companies and their customers and has legal power to adjudicate on individuals' complaints. The service is COMPLETELY free to use. 

How does it work? 

We give you the full rundown on how to make a complaint below, but in a nutshell, the process works like this:

• You fill in a form. If you've already complained to the company and it's not helped, simply go to the ombudsman's website and fill in a form. You don't need any legal help at all, it's all pretty straightforward. 

• It puts your case to the company. Once you've made the complaint, it asks the firm what happened, effectively it asks the company for its side of the story.

• The company may agree. Once the ombudsman gets involved, it's common for companies to just roll over and pay out what they owe to avoid a full investigation.

• If there's no agreement, it may make a legally-binding final decision. The final decision is based on fairness, to try to ensure the customer hasn't been mistreated. Roughly speaking, it's done on the basis of the 'balance of probability' – in other words, what it thinks is most likely to have happened from the evidence it's given.

How the ombudsman can help you

Using the ombudsman is a very powerful technique. It's cheaper and safer than trying to get a resolution via the courts. More importantly, unlike the courts, which have to rely on whether the company has broken any law, the ombudsman service follows the regulator's 'treating customers fairly' rules. This means it can rule against companies EVEN if they're acting within the law, as this isn't the only thing it takes into consideration.

The three things it'd look at are:

• The law of the land. The primary source is the law. If companies' actions break the law, then it's clear-cut.

• Regulators' rules and guidance. The rules of regulators, including the Financial Conduct Authority (FCA), also play a key part. If the FCA has indicated how it wants firms to behave and a firm breaks that, it can be deemed unfair.

• Good industry practice. This is the most interesting one, as it allows the ombudsman to define what good practice is.

In most cases, it means the ombudsman will look at any trade bodies' standards, such as the Lending Code. But it can also look at what's seen as common good practice and what would be reasonable in the circumstances of the case. If a particular company goes against that, it can deem its actions unfair and put things right for you.

What sort of products/services can you complain about?

Its range is huge – most recent figures show the ombudsman resolved just over 280,000 complaints between April 2022 and March 2023. It doesn't just cover regulated financial activity, but how companies operate in general, to ensure you're being treated fairly.

If you're not sure your complaint is covered, or you just want to find out how to get started with your complaint, you can use the free 'complaint checker' on its website – here are some typical areas the ombudsman deals with:

• Bank accounts. Current accounts are one of products the Financial Ombudsman receives most complaints about. Historically, the big one has been complaints about bank charges, but that is not a big thing now many banking complaints are about fraud and scams.

• Credit cards. The ombudsman can deal with any inappropriate behaviour, such as an unexplained increase in interest rate, disputed transactions, or not paying Section 75 claims.

• Car finance. The ombudsman has seen an increase in car finance complaints, and has currently paused making final decisions on complaints relating to commission arrangements as a result of the FCA's investigation (we go into more detail about who's affected and how to complain in our Car finance FREE reclaim tool & guide and our Car finance commission disclosure guide). However, the ombudsman will look at other forms of car finance mis-selling, such as affordability issues – see more in Mis-sold car finance. 

• Debt collection and irresponsible lending. The ombudsman can look at complaints about debt collection companies as well as the lending policies of anyone that holds a consumer credit licence, including payday lenders.

  For example, if you feel a lender is harassing you or not treating you properly according to the FCA Consumer Credit handbook (link opens PDF), you can complain. The ombudsman will need to see that you've tried to come to an arrangement with the lender but it'll investigate if you think you've been treated unfairly. Also see our Debt help guide for info on how to sort out debts.

• Payment Protection Insurance (PPI) and other insurance. A big category of complaints used to be related to the dire selling of PPI. Car, home, travel, and pet policies, roadside assistance, income protection, critical illness and private medical insurance are all also under the ombudsman's remit. Complaints can be about rejected, delayed and unpaid claims, non-disclosure of information and more.

  When a firm sells you an insurance product, since April 2013 the onus has been on the insurer to ask you what it needs to know so it can figure out whether the policy's suitable for you (before then, you were expected to volunteer this information yourself).
  

  So, if the insurer rejects your complaint, and it didn't ask you the vital questions that would determine if you were eligible to claim, you can take it to the ombudsman as a mis-selling claim. 

• Investments. The ombudsman doesn't deal with complaints that are solely about the way an investment has performed. But it can help with many areas to do with with-profits or whole-of-life policies, unit-linked bonds, savings endowments and stockbrokers. It also covers where people are told they're getting low-risk products, but are actually sold risky deals.

• Mortgages and loans. This covers a vast range of issues, not just with lenders, but also with mortgage brokers. It includes the way lenders handle mortgage arrears problems, or whether a mortgage or loan was affordable when it was first taken out.

• Payday loans. Did you get a payday loan that you couldn't afford to repay as the lender didn't check your finances properly, or kept trying to sell you it again and again? If so, you may be able to reclaim £100s or even £1,000s – the ombudsman can help. 

• Pensions and annuities. Complaints can be about the suitability of a pension plan or administrative matters such as delays, though if you have administrative problems (involving an employer or trustees, for example), you should go to the Money and Pensions Service first.

• Savings. The ombudsman can look at ISA applications that aren't processed correctly or on time, what happens to "rollover" savings bonds when they end, or other administrative errors.

As well as financial compensation, the ombudsman can also ask companies to try and rectify other problems too, such as: correcting information on a credit file, or reinstating a no-claims discount. It's the ombudsman's aim to return you to the position that you would have been in had the company acted properly. 

To show you what's possible, here are some success stories: 

How to make a complaint

It's a simple two-step process:

First, ALWAYS complain directly to the company

You can't just go to the ombudsman. It'll always want to see proof that you tried to settle your dispute with the company first.

In many cases, a company's first reaction will be to reject your complaint. This doesn't mean you've no case. It's not necessarily about rights and wrongs, it's about commerce. It's cheaper for a business to say no, produce a legalese argument to befuddle you, and hope you'll cower in a corner.

So expect a rejection and don't be phased by it one jot. To help you remember your rights, we've penned a wee poem to help you remember...

Then complain to the ombudsman

However, you can then go to the ombudsman if...

• The financial company won't help.

• You have waited eight weeks and still haven't heard back.

• Your bank has sent you a rejection letter suggesting you use the ombudsman.

To start your complaint, visit the Financial Services Ombudsman website find out more about the process and submit a complaint. 

You can either fill in the complaint form online or print out a copy and post it back to explain your case. Attach any evidence if you have it (this could be statements detailing charges, or your correspondence with the lender). Then leave it with the ombudsman. It'll contact you if it needs more information or has any possible resolutions. 

You can also call the helpline on 0800 023 4567 (open 8am to 5pm on Monday to Friday). If you're not good at form-filling, or English isn't your first language, the ombudsman can take you through the process or find an interpreter.

FOS form-filling help

The form's simple to fill in, but take care doing it. We've written a guide to help, which takes you through filling it in, step by step.

How long will it take to get a decision from the ombudsman? 

You won't get an instant judgment from the ombudsman. Disputes that go all the way can take three to nine months. While there's no guarantee you'll win, 10,000s of people every year do. It means companies must take you seriously.

Vulnerable customer? If so, you'll get priority

Though the ombudsman can take several months to resolve some disputes, it does try to resolve complaints from vulnerable customers as a matter of priority.

You might have poor health, had an unexpected life event, or caring responsibilities. 

If you believe your complaint is urgent and you have a vulnerability, then let the ombudsman know this when you escalate your complaint to it – as this may speed the arbitration process along. 

What to do if you're not happy with the ombudsman's decision

The Financial Ombudsman Service's decision is usually made by an assigned case worker. If you disagree with the result you can ask for a formal decision to be made by one of the actual ombudsmen at the service. This usually takes several months as it involves a detailed investigation into your case.

Fewer than one in 10 cases end up with an ombudsman, and some of those are there because the finance company has requested it. After the ombudsman's decision, there is no further appeal process.

After that, while the finance company must accept the ombudsman's decision, you still have the right to take the company to court. 

Think carefully about this. While the ombudsman can decide purely on fairness, a court will only rule based on legal wrongdoing. For information on how to make a small claim for up to £10,000, see our Small claims court guide.

If you feel the ombudsman hasn't handled your case correctly – perhaps there were unnecessary delays – you can make a complaint about the service provided. If that doesn't resolve it, you've a right to go to the independent assessor. But this can only be about be quality of service you've had, not about the ombudsman's actual decision.

FAQs