Short Definition:
The Financial Ombudsman Service is the free, independent body that resolves complaints between UK consumers or small businesses and financial firms when the firm's own complaints process hasn't fixed the problem.
Full Explanation:
Consumers or eligible small businesses can escalate an unresolved dispute to the FOS once they've completed the firm's internal complaints procedure (or eight weeks have passed without resolution), and its decisions are binding on the firm if the complainant accepts them. It sits outside the FCA and PSR's rulebook-setting role — it doesn't write or enforce regulation, it adjudicates individual disputes, including APP fraud reimbursement cases where a customer disagrees with their bank's decision. Awards are capped, and the current maximum for complaints is £430,000, though this figure is periodically reviewed and can change.
In Practice:
A small business owner whose APP fraud reimbursement claim was rejected under the consumer standard of caution exception, and who believes their bank got the gross negligence assessment wrong, can take that dispute to the FOS free of charge rather than pursuing costly litigation.
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Source Link:
https://www.financial-ombudsman.org.uk
Last Reviewed:
20260726
