New Financial Ombudsman Service complaint fee: what you need to know

12 Mar 2025, 55 mins ago

What is happening on 1 April 2025?

From 1 April 2025, the Financial Ombudsmen Service (“FOS”) will introduce a case fee of £250 for every 11th complaint, and every subsequent complaint onwards, brought by professional representatives, such as law firms and certain claims management companies (all referred to as CMCs for ease of reference).

Whom does the case fee apply to?

As stated above, the £250 case fee will apply to CMCs. However, FOS has made a provision that the £250 case fee will not be applicable to 10 cases that are referred to it by each CMC in a year. As such, FOS provided for 10 ‘free cases’ per annum to each CMC.

There will be a statutory exemption for charities and representatives of complainants, such as family members or friends and free advisory organisations. In addition, the service of FOS will remain free for complainants who come to it directly, without representation.

In cases where the £250 case fee is applicable if FOS’s outcome goes in favour of the customer (i.e. the complainant), £175 will be credited to the professional representative (i.e. the law firm). If FOS’s outcome is not in the customer’s favour, the case fee for the financial business (i.e. the respondent) the complaint was made against will be reduced from £650 to £475.

What is the rationale for this change?

In its policy statement, FOS cited two main objectives of the £250 case fee, which are:

To create a fairer funding model; and
To encourage effective and efficient dispute resolution, and, in particular, “encourage CMCs to submit better-evidenced complaints and to consider the merits of complaints more diligently before referring them”.

Why is FOS implementing the fee from April 2025?

Between the period of April and December 2024, around 47% of complaints received by FOS were from CMCs, compared to just 21% reported in the first nine months of 2023/24. As a result, cases referred by CMCs have been actively driving up FOS’s costs.

We have previously explored this in a blog entitled:

Surge in debanking complaints: FOS’s findings and FCA’s position

What will CMCs need to do in light of the case fee?

In its policy statement, FOS voiced its concern that the case fee may be passed onto the complainants (i.e. the customers of law firms). However, FOS were mindful that the Solicitors Regulation Authority (SRA) and the Financial Conduct Authority (FCA) have rules which mean consumers have to be given pre-contractual disclosures, such as disclosure to the customer of the fact that FOS’s service is free of charge if they submitted their complaints without the assistance of a CMC, as well as how much the consumer will need to pay the CMC in its representation to FOS.

Bank Account closures or “de-banking”

We have previously written about how other issues individuals may face, including account closures, are not limited to political figures in the UK and affect many thousands of lawful individual and business customers every year. These cases have exposed the difficult balance many financial institutions and their individual and business customers must navigate to gain and maintain access to basic banking services.

To assist those whose accounts have been closed, Gherson’s financial crime, investigations and regulatory team have previously written blogs titled

Adverse information in compliance databases

We also being increasingly approached by individuals who feel that incorrect and/or inaccurate data about them stored in compliance databases is having an adverse effect on their relationship with financial institutions and who are, therefore, facing subsequent issues, such as bank accounts being closed and difficulties in opening a bank account.

We have also written a serious of blogs on a basic overview of the main functions of compliance databases like World-Check and how you can correct information about yourself on such databases?

Could a CIFAS Marker be affecting my ability to obtain financial services?

We are increasingly approached by individuals who have been adversely affected by a CIFAS marker and want advice on how to remove this.

In some scenarios, the CIFAS marker against the individual will have been added wrongly, and being in this unfair situation can have a hugely detrimental effect due to the wide-ranging, complex and adverse consequences for the individual affected.

In a previous blog we examine what a CIFAS marker is and how to try and get it removed.
In a later blog, we examined what are the next steps after a bank and CIFAS have refused by complaint.

Updated: 12 March 2025

HOW GHERSON CAN ASSIST

Gherson’s regulatory, white-collar and investigations team are highly experienced in providing assistance on what you can do if your bank freezes or closes your account. This includes assisting you in submitting a request under data protection legislation, otherwise known as a Data Subject Access Request, to ascertain what information banks and other financial institutions may be holding on you and their decision-making, and then analysing the response and assisting with any appropriate challenge.

If you have any questions arising from this blog, please do not hesitate to contact us for advice; send us an email at enquiries@gherson.co.uk or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay up to date with the latest developments.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.