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Changes to the Financial Ombudsman Service (FOS) access and limits

The Financial Ombudsman Service (FOS) is an independent official body that offers a complimentary service for settling disputes between financial based companies and their customers.

Only “eligible complainants” can use the FOS and from 01 April 2019, the Financial Conduct Authority confirmed plans to extend this access to include small and medium-sized enterprises (SMEs). Under these new rules, an SME will be an eligible complainant if:

  • It has an annual turnover below £6.5 million; and
  • It employs fewer than 50 persons or has a balance sheet total of less than £5 million, at the time that it refers the complaint.

Charities who have an annual income of less than £6.5 million and trustees with a net asset value of less than £5 million are now also eligible too.  This will result in an additional 210,000 SME’s who will be eligible to refer unresolved complaints to the FOS.

Increase in Award Limit

From 01 April 2019, the level of award that the FOS can make to successful complainants has increased from £150,000 to £350,000 for complaints regarding the actions of a firm on or after this date. For complaints regarding actions of a firm prior to 01 April 2019, the limit will only slightly increase to £160,000.  The FCA has also confirmed that from 01 April 2020 both award limits should be automatically adjusted annually on the 1st April to ensure they keep pace with inflation.