UK FOS policy statement on modernising the redress system

The UK Financial Ombudsman Service (FOS) has published its policy statement on the next phase of its service reforms to streamline and modernise the complaints process. Following its joint consultation with the UK Financial Conduct Authority (FCA), the FOS has confirmed that it will introduce changes to its operations to allow it to focus its resources on the cases it was set up to resolve as a quick and informal alternative to the courts. The reforms include:

• An amendment to DISP 3.6.4R to provide greater clarity that FOS decisions are based on the standards applicable at the time of the act or omission complained about and will not be applied retrospectively, providing a foundation for proposed legislative changes to the "fair and reasonable" remit currently progressing through Parliament. Although the rule change will take effect from 1 October, it will apply to all current and future complaints given the change is clarificatory only.
• New powers, which will come into effect on 1 October, to dismiss complaints that are better suited to the courts, law enforcement, other dispute resolution processes or where no financial loss or material distress has been suffered.
• The introduction of a new registration stage from next year to ensure complaints are within scope and ready for investigation before allocation to a caseworker, with further consultation on differential case fees planned for later this year.

The final rules implementing the amendments to DISP concerning dismissal of cases and the fair and reasonable test are set out in the Redress Reforms (No 2) Instrument 2026 which comes into force on 1 October. Later this year, the FOS will also publish the first of its joint thematic reviews with the FCA to provide more insight on the types of complaints it sees and its approach to resolving them. The reforms are part of wider steps that the FOS has taken to modernise its service including: (i) an updated memorandum of understanding with the FCA to ensure its decisions are aligned with regulatory rules; (ii) charges for professional representatives to refer cases to ensure fairer costs and better evidenced cases; and (iii) changes to the interest rate applied to some of the awards that it makes to better reflect present economic conditions.

Return to main website.