The Financial Conduct Authority and the Financial Ombudsman Services program jointly handle high-volume complaints between consumers and companies to reduce the time it takes to resolve disputes.
Like several city regulators, both bodies are under pressure to relax regulations to comply with the government’s growth agenda.
This is because the Treasury Department’s economic secretary Emma Reynolds completed a review to ensure that the financial ombudsman service is not behaved like a “quasi-regulator” and has a higher respect for the FCA.
FOS also confirmed that it will direct the company to hand over to consumers to lower compensation expenses.
The FCA said the joint approach with the FOS case “will help businesses identify and resolve issues before complaints escalate and aim to improve predictability, so businesses are confident in investing, innovating and supporting growth in the UK”.
Regulators will also “work together on specific or novel issues [that] Can clog the system and cause significant delays. ”
After the appeals court ruled in October last year, the bodies would expect to bear the compensation claims of millions of motorists if they were compensation for millions of motorists when purchasing a car.
Recommendations for these two corpses include:
- A new recommendation process to improve regulatory consistency and leading complaint process to see the emergence of “novel and important” issues
- Clear guide to companies reporting issues to the FCA, as well as good practice examples to help identify and resolve complaints
- Guidelines to help industry evaluate and trigger situations that require a wider impact, and complaints may be filed
- Change the way FOS handles complaints to ensure they are fully problematic and prepared before the investigation begins
“When something goes wrong, it’s right for people to get compensation. But the lack of certainty in the financial remedy system can prevent investment and innovation.
“Our changes will help create a system that is more predictable for the company and make quick and fair compensation for where it owes it, thus supporting growth in the UK.”
James Dipple-Johnstone, Interim Ombudsman for FOS, noted: “These reforms mark an important step in the UK’s remedy system, making it more agile, responsive and more suitable for today’s economy.
“Our changes will bring consistency and predictability to businesses and consumers, allowing us to better focus on our core purpose – quickly resolve personal disputes and resolve them in minimal form.”
FOS also confirmed that interest in bringing instructed companies to pay some awards will be cut to track the Bank of England’s base average interest rate plus 1%.
This comes attributable to the previous 8% rate, “despite significant changes in the economic landscape and interest rate environment, “has remained the same for nearly 25 years despite significant changes.”
FOS has added a new rate: “It will be calculated as a weighted average for a period of time when the currency expires (when the loss consumer occurs) until the payment date.
“The awards will still reflect any actual losses suffered by consumers as they are now.”
“The travel directions included in these proposals indicate that the dynamics between FOS and FCA are more certain, consistent and confident, which will benefit both the company and consumers,” said Stephen Haddrill, Director General of the Finance and Leasing Association.
“We look forward to working with the government, the FCA and the FOS to ensure that these changes are implemented effectively as soon as possible,” Haddrill added.
FOS added that if it is found that consumers are “lost” due to a company’s mistake, it can order the company to pay compensation as well as interest.
It added: “Our goal is to get consumers back to situations where their financial companies are making no mistakes.”
It noted that if the compensation is not paid on time, it could also instruct the company to pay 8% interest.
The agency plans to introduce the new fee structure from January 1, 2026 “new complaints mentioned to us from that time, but will confirm that the plan is implemented in due time”.
