Financial Ombudsman Service

FOS handles around 200,000 complaints a year — banks, lenders, insurers, financial advisers, payment service providers, claims management companies. Free to consumers; firms pay a case fee. Consumers must first complain to the firm and allow 8 weeks for a response (or get a deadlock letter) before referring. FOS investigates on the documents in most cases; oral hearings are rare. The FOS Ombudsman applies what is 'fair and reasonable in all the circumstances' — wider than strict legal entitlement. Awards include refunds, distress and inconvenience payments (£100-£3,000 typical), and policy changes.

In practice, the two things that decide a FOS case are the time limits and the paperwork. You must refer the complaint to FOS within six months of the firm's final response letter, and the underlying complaint must generally be made within six years of the event or, if later, three years from when you knew or ought reasonably to have known there was cause to complain. Those limits are strict, and a final response letter is the document that starts the six-month clock — so read it carefully rather than filing it.

Worked example: Marta is refused a travel insurance claim on the basis of a pre-existing condition she says she declared. She complains to the insurer, which issues a final response rejecting the claim. She refers it to FOS within the six-month window, attaching the policy schedule, the online application screenshots showing what she disclosed, the medical evidence, and a short chronology. The investigator finds the question was ambiguously worded and that the insurer could not show Marta answered dishonestly, and recommends the claim is paid with interest at 8% plus £250 for distress and inconvenience. Marta accepts, which makes the decision binding on the insurer; had she rejected it, she could have asked for a final decision from an ombudsman.

The misconceptions are common. FOS applies what is fair and reasonable in all the circumstances, which is broader than strict legal rights — so a claim that would fail in court can succeed here, and vice versa. Accepting a decision is final and closes off court action on the same complaint, so consider the offer carefully. FOS covers most consumers and smaller businesses, but not larger ones. And it cannot fine a firm or force a change of policy for everyone; it decides your individual complaint, while the FCA handles regulatory failings.

FOS is the financial services counterpart of the LGSCO for councils and the PHSO for the NHS and government, and you reach it by way of a final response letter or a deadlock letter. Read our guides to financial complaints and deadlock letters.