Your Rights Under the Financial Ombudsman Service – How to File a Complaint Against a Lender

The Financial Ombudsman Service (FOS) provides an independent and impartial mechanism for resolving complaints between consumers and financial service providers without going to court. It covers banks, insurers, lenders, and other regulated financial businesses.

The FOS's aim is to place the consumer in the position they would have been in had the financial business not acted incorrectly.

What Complaints Does the FOS Cover?

The FOS can help with complaints about:

• Personal loans and credit agreements
• Credit cards and store cards
• Mortgages
• Banking and current accounts
• Hire purchase agreements and pawnbroking
• Money transfer services
• Debt collection practices
• Savings and investment products
• Financial and investment advice

Step-by-Step: How to File a Complaint

Step 1: Complain Directly to the Lender First

Before the FOS can get involved, you must raise your complaint directly with the financial business concerned. The business then has up to eight weeks to resolve the complaint.

Keep records of:

• When you made the complaint (date and time)
• How you made it (phone, email, online form, letter)
• What you said
• Any reference numbers they gave you

Step 2: Wait for the Lender's Final Response

If the lender resolves the complaint to your satisfaction within eight weeks, the process ends. If not, you will receive either:

• A final response letter explaining their decision, or
• A letter saying they need more time (but this cannot extend beyond eight weeks total)

Step 3: Escalate to the FOS Within the Time Limit

This step is critical. Once you receive the lender's final response (or eight weeks pass without a resolution), you have six months to refer the complaint to the FOS.

If you miss this deadline, the FOS may not be able to help you.

Step 4: Submit Your Complaint to the FOS

You can submit a complaint to the FOS:

• Online through their website
• By phone
• By email
• By post

You will need to provide:

• Your name and contact information
• The lender's name
• What happened (clear, chronological account)
• Any evidence (emails, letters, screenshots, call logs)
• The lender's final response letter (if you have it)

Step 5: The FOS Process

Once your complaint is accepted, the process follows these stages:

Phase 1: Adjudication and Mediation

An FOS adjudicator assesses your complaint. Their role is to encourage early resolution through informal mediation or a recommended settlement. If both parties accept the recommendation, the matter is resolved.

Phase 2: Formal Adjudication (if mediation fails)

If informal settlement is unsuccessful, the adjudicator issues a formal written assessment. This document sets out whether they uphold your complaint and why.

Phase 3: Ombudsman's Final Decision (if either party rejects the adjudicator's decision)

Either you or the lender can reject the adjudicator's outcome and request a final determination by an Ombudsman.

The Ombudsman issues a final decision. This decision is binding on the lender if you accept it. If you do not accept it, you can still pursue the matter through the civil courts.

Compensation Limits and Remedies

The maximum amount the Ombudsman can award is £100,000.

The FOS can order the lender to:

• Compensate you for financial loss
• Compensate you for distress and inconvenience
• Take specific actions to put things right (e.g., correcting credit file entries)
• Apologise to you

Important: The FOS Covers CMCs Too

Claims Management Companies (CMCs) – businesses that help consumers make complaints – are also regulated by the FCA. If you have a complaint about a CMC's service, you can also bring that complaint to the FOS.

The FOS can help with CMC complaints about:

• Not clearly explaining fees before you signed a contract
• Failing to keep you informed about progress
• Causing unnecessary delays
• Providing incorrect advice
• Not responding to your communications

The FOS cannot change the outcome of your original claim (e.g., overturn a tribunal decision) – it can only address poor service from the CMC.