The Financial Ombudsman Service (FOS) is a free service available to assist consumers and financial services businesses which are unable to resolve a complaint independently.

Created in 2001 by the Financial Services and Markets Act as an alternative to the court system, the FOS aims to resolve all disputes in a fair and impartial way, taking into consideration the individual circumstances of each case.

The process is intended to be straightforward: consumers contact the business in the first instance before escalating a complaint to the FOS if necessary. On receipt of a final response to their complaint from the business, the consumer has six months to ask the FOS to become involved. A request can easily made using a complaint form available online or over the telephone whilst speaking with an advisor.

The Legal Service at Stewarts has provided assistance to claimants in FOS decisions, including on a recent critical illness claim. The case involved a complaint to our client’s insurer following their refusal to pay out based on their definition of the term ‘total and permanent disability’. The complaint was upheld by the ombudsman’s final decision and the insurer agreed to pay the sum in full. The full report on the case can be found here.


How does it work?

Once the FOS are involved in a complaint you should receive an initial response within 10 working days, and the allocated case handler will consider the facts to provide an initial assessment within an estimated period of up to 90 days.

If the consumer does not agree with the FOS’ initial assessment of their complaint, they can make a request for a final decision to be made by an ombudsman. In the event that the consumer accepts this final decision, it is legally binding on the business whom must adhere to the FOS guidance on how to resolve the complaint.

If the consumer chooses not to accept FOS guidance regarding their complaint, they are able to withdraw from the process at any time up to the final decision. It will be difficult to revisit a complaint in the future if this does occur.



Like many organisations, the FOS has been badly impacted by the Covid-19 pandemic, resulting in over 28,000 complaints waiting to be investigated at the beginning of 2021 according to the organisation’s 2020/21 annual report and accounts.

With expectations of the process differing from reality, consumers submitting complaints to the FOS have waited for what they have described as an “unacceptably long time”. In its most recent quarterly complaints data report, released in November 2021 and covering the previous three months, the FOS revealed it had received:

  • 70,658 new enquiries;
  • 40,443 new complaints; and
  • 8,364 referrals to an Ombudsman.

The overwhelming volume of complaints and time required to allocate case handlers to review them is causing significant delays, leaving the vulnerable in financial distress as they await a decision. The Covid-19 pandemic has slowed the process down considerably: in March 2021 there was a backlog of 158,000 complaints waiting to be assessed.

In the hopes of tackling the complaints backlog, the FOS proposes to move towards automation of their system by introducing a digital portal as an alternative way to begin a complaint. They also plan to collate their existing staff into industry specific teams for effective claims management going forward.


FOS decisions – a case study example

A recent FOS decision upheld a complaint against a major national bank over their refusal to provide a mortgage payment holiday. The consumer requested a payment holiday of three months at the start of the Covid-19 pandemic, which the bank refused due to existing arrears on the account. A nil payment arrangement was put in place as an alternative, allowing the bank to chase the consumer for the accrued debt, placing them in further financial difficulty. Halifax had adversely affected their credit file by including the three months of arrears accrued whilst the nil payment arrangement was in place.

The ombudsman’s final decision was that Halifax should have granted a three month payment holiday when the consumer first asked for it. Their refusal prevented the consumer from entering into a new fixed rate mortgage with the bank, due to the adverse effect on their credit rating. It was found that Halifax failed to follow FCA guidance produced in March 2000 which stated that “customers in payment shortfall should not receive less favourable treatment than other customers.” As a result, Halifax was asked to pay £200 in compensation to the consumer for the upset caused, and to rectify any reports made to the credit reference agency if necessary.

The FOS stated that it is also a requirement for the bank to clearly explain to all consumers the effect of not making mortgage payments for a period of time, before the consumer enters into a mortgage payment holiday.



The Financial Ombudsman Service is a useful system available to those intending to resolve a financial complaint, with their free service continuing to provide support to thousands of consumers each year.

With the proposal of a streamlined digital service and consolidated teams created to tackle industry specific complaints, the FOS appears determined to provide fair and impartial guidance to those left vulnerable whilst locked in a dispute with a business within the financial sector.


Stewarts Pro Bono team

Life after serious injury can be tough enough. As part of the Legal Service at Stewarts, our Pro Bono team have assisted with a complaint to the FOS by appealing a decision made by the financial business to the FOS on our behalf.

Our successful outcomes have seen insurers asked to reconsider a denied claim under a policy, and even compensation provided to a consumer whom was unsatisfied with the handling of their complaint.


This article was written by Senior Paralegal Shanice Browne




The Legal Service – We are here to help

The Legal Service, delivered by our pro bono team, provides patients with advice without obligation, for however long it takes to resolve the issue. Our support is available regardless of the circumstances of an accident and regardless of whether a patient has a personal injury claim.

In these difficult times, the concerns of our pro bono clients are likely to be more stark than those in more fortunate circumstances. The Legal Service will be available throughout the crisis to help in any way we can to ease the burden on our clients.

To get advice from The Legal Service, please contact Kara Smith by phone on 020 7822 8000 or by email at

You can find further information regarding our injury expertise, experience and team on our Personal Injury pages.



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