How does making a complaint to the Financial Ombudsman Service work?

Full answer

The Financial Ombudsman Service (FOS) is a free, independent complaints resolution scheme for disputes between consumers and financial businesses -- banks, insurers, lenders, pension providers, investment firms, and (increasingly) BNPL providers -- and can be a powerful route when a firm's internal complaints process does not resolve things fairly. **Step 1: complain to the firm first** FOS generally will not consider a complaint until you have given the financial firm a chance to resolve it themselves -- most firms have a formal complaints process, and by rule must issue a "final response" letter within eight weeks of receiving your complaint (though many resolve faster). If they fail to respond within eight weeks, you can go to FOS anyway. **Step 2: refer to FOS within the time limit** Once you have a final response (or the eight weeks has passed without one), you generally have six months from the date of the final response letter to refer the complaint to FOS -- missing this window can mean losing your right to have FOS consider the complaint, so it is worth acting promptly rather than sitting on a final response letter. **Step 3: FOS investigates** An FOS investigator reviews both sides' evidence and typically issues an informal view on the merits of the complaint first, giving both parties a chance to respond or provide more information before a final decision is made. Many cases settle at this stage without needing a formal Ombudsman decision. **Step 4: formal decision if unresolved** If either party disagrees with the investigator's view, the case can be escalated to a formal Ombudsman decision, which is legally binding on the financial firm if the customer accepts it (the customer is not obliged to accept and remains free to pursue the matter through the courts instead, though this is rare and often impractical for smaller claims). **What FOS can award** FOS can direct a firm to correct an error, pay back money wrongly charged, or pay compensation for distress and inconvenience caused, up to certain limits (which are periodically uprated) -- for larger disputes, the courts may be a more appropriate route, and FOS will advise if a complaint is outside its remit or award limits. **What FOS cannot do** FOS does not fine firms, cannot award punitive damages beyond fair compensation for the actual harm caused, and cannot handle complaints about firms' general commercial decisions (like a bank simply refusing to lend to you), as opposed to how a decision was reached or communicated. **Cost to the consumer** The service is completely free to use for consumers -- you never pay to bring a complaint to FOS, and using a claims management company or solicitor is rarely necessary or beneficial, since FOS is designed to be accessible without needing professional representation. **Practical tip** Keep a clear paper trail of all communication with the firm (emails, letters, call reference numbers) from the very start of a dispute, since FOS investigators rely heavily on the evidence both sides can provide when reaching their view.

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