Escalating to the Ombudsman
The Financial Ombudsman Service (FOS) is the independent dispute resolution body for financial services complaints in the UK. It is free for consumers, takes a fresh look at the case, and its decisions are binding on lenders if accepted. Most unaffordable lending claims that don’t resolve at the lender stage end up at FOS, and many of those succeed there. This page sets out when you can refer to FOS, how to do it, and what to expect.
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When you can refer to FOS
You can refer a complaint to FOS once one of the following has happened:
- The lender has issued a final response and you are not satisfied with it.
- Eight weeks have passed since you complained to the lender and they have not issued a final response.
The first route is by far the most common. Once the final response has been issued, you have six months from its date to refer to FOS. Past that deadline, FOS generally cannot help.
How to refer
FOS accepts complaints by:
- Online complaint form on the FOS website.
- Phone — FOS has a consumer helpline.
- Letter — to the FOS address.
- Email — for supplementary documents and correspondence once the case is open.
A claim partner will handle the FOS referral as part of the case if you are using one. If you are doing it yourself, the online form is usually the easiest route — it walks you through the information FOS needs.
What to send to FOS
A complete referral typically includes:
- Your details and the lender’s details.
- The original complaint to the lender (a copy).
- The lender’s final response (a copy).
- Why you disagree with the final response — what you think the lender got wrong.
- Supporting evidence — bank statements from the period, your statutory credit report, any other relevant material.
- A short narrative explaining what was happening at the time and how the lending affected you.
You don’t need legal-style pleadings. FOS is designed for ordinary consumers and case handlers will work with whatever you provide. Plain English is fine.
What FOS does with the case
After referral:
- Acknowledgement — usually within a few weeks, with a case reference.
- Allocation to a case handler — given FOS’s backlog, this can take months.
- Investigation — the case handler obtains the lender’s file directly, reviews your evidence, may ask either side for additional information.
- Investigator’s view — a non-binding written opinion (sometimes called an “adjudication”) on whether the complaint should be upheld and what redress would be appropriate.
- Ombudsman’s final decision — if either side rejects the investigator’s view, an Ombudsman issues a final decision. If you accept it, it is binding on the lender.
The two-stage test FOS applies
FOS does not just rubber-stamp the lender’s view. It applies the same two-stage approach used in the FCA Handbook and worked through in many published Ombudsman decisions:
- Stage one — were the checks the lender carried out reasonable and proportionate to the circumstances?
- Stage two — if proper checks had been carried out, would they have shown the lending was unaffordable?
How the Financial Ombudsman handles unaffordable lending complaints.
Time limits at FOS
FOS has its own time limits, in DISP 2.8.2R:
- Six months from the lender’s final response.
- Six years from the event being complained about, or three years from when the consumer became aware (or ought reasonably to have become aware) of cause to complain — whichever is later.
The award limit
FOS can require a lender to pay redress up to a fixed monetary limit. For complaints referred from 1 April 2024, the limit is £430,000. For most unaffordable lending complaints, the limit is more than enough. If your potential redress exceeds the limit, court action under Section 140A is the alternative route, although it is slower and carries costs risk.
Outcomes you can expect at FOS
Where the complaint is upheld, FOS typically directs:
- A refund of interest, fees and charges from the point at which the lending was unaffordable.
- 8% simple statutory interest on top.
- Removal of adverse credit-file entries linked to the unaffordable lending.
- Where there is an outstanding balance, the refund applied against it first, with any surplus paid out.
- Sometimes, additional compensation for distress and inconvenience — usually modest.
A binding final decision must be complied with by the lender; FOS can refer non-compliance for enforcement, and consumers can enforce a binding decision through the courts.
Related guides
- How the Financial Ombudsman handles unaffordable lending complaints
- Lender rejected your complaint — what to do
- How long does an unaffordable lending claim take?
- Section 140A and the unfair relationship test
- How redress is calculated
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