Glossary · UK
What is Financial Ombudsman Service (FOS)?
An independent UK body that settles disputes between consumers and financial businesses free of charge, with the power to award compensation of up to £415,000.
Full Definition
The Financial Ombudsman Service (FOS) was established by the Financial Services and Markets Act 2000 and began operating in 2001. It provides a free, independent dispute resolution service for consumers who have a complaint against a financial firm -- including banks, building societies, insurers, mortgage lenders, investment firms, credit brokers and payday lenders. Before referring a complaint to FOS, the consumer must first give the financial firm an opportunity to resolve it: the firm has up to 8 weeks to provide a final response. If the consumer is unhappy with the response (or no response is received within 8 weeks), they can refer the complaint to FOS free of charge. The Ombudsman investigates complaints and can require firms to pay compensation, issue an apology, or take corrective action. From April 2024, the FOS can award up to £415,000 per complaint (for complaints referred on or after that date) and up to £200,000 for earlier complaints. Firms regulated by the Financial Conduct Authority (FCA) are legally required to comply with Ombudsman decisions if the consumer accepts the award. The FOS handles around 200,000 new complaints per year; the most common categories are bank account disputes, payment protection insurance (PPI) legacy cases, motor finance, and insurance claim rejections.