HM Treasury has announced it will bring forward legislation to reform the Financial Ombudsman Service (FOS), aiming to return it to a fast, impartial dispute resolution body operating within a clearer and more predictable framework alongside the Financial Conduct Authority (FCA). The package follows a public consultation on concerns that, in a small but significant minority of cases, the FOS has acted as a quasi-regulator, creating uncertainty for consumers and firms. The planned legislative changes include adapting the FOS “fair and reasonable” test so that where firms have met their obligations under relevant FCA rules, the FOS must find they acted fairly and reasonably. A new referral mechanism would require the FOS to seek the FCA’s view where there may be ambiguity in what FCA rules require or where an issue could have wider implications for the sector. The reforms also include an absolute 10-year time limit for bringing complaints, with the FCA able to make exceptions, structural changes giving the Chief Ombudsman overall responsibility for FOS determinations, and a requirement for the FOS and FCA to publish regular thematic reports clarifying how certain complaint types will be considered. The consultation response also confirms the FOS will not become a subsidiary of the FCA. Legislation will be brought forward when Parliamentary time allows. Ahead of the reforms taking effect, the FOS and FCA have set out separate proposals intended to speed up complaint resolution and help firms resolve customer issues while escalating major or emerging redress issues earlier.

Original source View in tracker