Organisation pledges faster dispute resolution and improved efficiency
By Financial Correspondent | 4 April 2025
The Financial Ombudsman Service (FOS) has announced plans to increase its case resolution capacity by 20% in the 2025/26 financial year, aiming to provide a faster and more efficient dispute resolution service for both businesses and consumers.
The FOS, which mediates disputes between financial firms and their customers, has set a target of resolving 270,000 cases—a significant rise from the previous year’s figures.
In a statement, the organisation outlined its strategy to enhance case-handling efficiency, adopt digital tools, and provide firms with better insights into complaint trends. These measures aim to prevent disputes from escalating and ensure quicker resolutions for affected consumers.
Motor finance complaints delay resolution of cases
One of the biggest challenges facing the FOS is the overwhelming number of motor finance commission complaints, which currently account for nearly half of its 190,000 open cases.
These cases have not been immediately resolvable due to ongoing legal and regulatory action, meaning thousands of consumers and businesses must wait longer for their disputes to be settled.
In addition to these cases, the FOS expects to receive 209,000 new complaints in the coming financial year, covering a wide range of financial issues such as bank accounts, credit cards, and insurance disputes.
Improving efficiency to meet growing demand
To accommodate the increased caseload, Jenny Simmonds, interim chief executive at the FOS, confirmed that the organisation is expanding its workforce and building flexibility into its operations.
“We are increasing our capacity to resolve cases productively, building flexibility into our workforce to respond to reasonable changes in demand,” she said.
By improving internal efficiency, streamlining processes, and utilising digital tools, the FOS aims to deliver faster resolutions and reduce backlogs for both consumers and businesses.
New charges for claims management companies
In a significant policy shift, the FOS introduced a £250 charge for claims management companies (CMCs) referring cases from 1 April 2025.
Under the new rules:
- Professional representatives can refer up to 10 cases per financial year for free.
- Beyond this limit, each additional case will incur a £250 charge.
- If the case is found in favour of the consumer, the representative will receive a £175 credit, effectively reducing the charge to £75.
This move is intended to discourage speculative or poorly evidenced complaints and ensure that only well-substantiated cases are referred.
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The FOS has highlighted concerns that many complaints in recent years have been driven by professional representatives who either charge consumers directly or take a percentage of any financial redress awarded.
By introducing these charges, the service hopes to reduce frivolous claims, allowing resources to be directed towards genuine disputes.
Ensuring a fair and effective dispute resolution service
The FOS plays a critical role in the UK’s financial sector, ensuring that consumers have a fair and independent avenue for resolving disputes when they are unable to reach agreements with financial firms.
While the increase in case resolution capacity is a positive step, challenges remain, particularly around delays linked to legal and regulatory uncertainty.
Industry experts have welcomed the FOS’s efforts to improve efficiency, but some warn that continued delays in resolving major cases—such as motor finance complaints—could undermine confidence in the service.
As the financial landscape evolves, the ombudsman service will need to balance the growing demand for dispute resolution while ensuring that its decisions remain fair, impartial, and transparent.
