9.4 Complaint Handling and the Financial Ombudsman Service
Key Takeaways
A DISP complaint alleges actual or possible financial loss, material distress or material inconvenience; FOS eligibility extends beyond consumers to specified businesses, charities, trusts and guarantors.
For ordinary complaints, DISP 1.6 requires a final response or a qualifying written response within eight weeks; payment-services and e-money complaints normally have a 15-business-day final-response deadline, extendable to 35 business days only in exceptional circumstances.
The FOS operates compulsory and voluntary jurisdictions. A timely accepted final ombudsman decision binds both complainant and respondent.
For complaints referred from 1 April 2026 to 31 March 2027, the FOS compulsory money-award limit is £455,000 for acts on or after 1 April 2019 and £205,000 for earlier acts. Interest on the money award, costs and interest on costs are excluded from calculating that limit.
DISP 1.9 requires complaint records, and DISP 1.10 governs applicable complaints returns to the FCA.
9.4 Complaint Handling and the Financial Ombudsman Service
A firm must recognise and handle complaints fairly and promptly under the FCA's Dispute Resolution: Complaints Sourcebook (DISP). The Financial Ombudsman Service (FOS) can independently resolve complaints within its jurisdiction.
Recognising a complaint and an eligible complainant
The FCA Glossary definition covers an oral or written expression of dissatisfaction about a financial service, claims management service or redress determination that alleges actual or possible financial loss, material distress or material inconvenience. The person need not use the word “complaint”, but dissatisfaction alone does not supply every element of the definition.
FOS eligibility is a separate question. Under DISP 2.7, eligible complainants include consumers, micro-enterprises, qualifying small businesses, charities with annual income below £6.5 million, trustees of trusts with net assets below £5 million, and specified others including guarantors. The relevant relationship with the respondent, activity, jurisdiction and referral time limits must also be checked. FOS is not limited to retail individual consumers.
Response timetable
| Situation | Main DISP requirement |
|---|---|
| Receipt | Send a prompt written acknowledgement and keep the complainant informed. |
| Resolved by close of the third business day after receipt | Send a summary resolution communication under DISP 1.5, where that route applies. |
| Ordinary complaint not resolved early | By the end of eight weeks, send either a final response or a qualifying written response explaining the delay and the complainant's FOS referral rights (DISP 1.6.2). |
| Payment-services or e-money complaint | Normally send a final response within 15 business days. Only exceptional circumstances beyond the respondent's control permit a holding response by then and a final response within 35 business days (DISP 1.6.2A). |
The eight-week rule is not an unconditional requirement to send a final decision by that date. A complainant can normally approach FOS after a final response or, for an ordinary complaint, when eight weeks have passed without one. The usual FOS referral period after a final response is six months, subject to the applicable DISP 2.8 rules and exceptions.
A final response states the firm's outcome and any proposed redress or remedial action. It must explain the right to take the complaint to FOS, include the FOS explanatory leaflet and website address, and include the required time-limit wording. Staff should distinguish this formal response from a progress update.
FOS jurisdiction and outcomes
FOS has compulsory and voluntary jurisdictions. Consumer-credit complaints may fall within the compulsory jurisdiction; there is no separate current “consumer credit jurisdiction” to list as a third scheme. An ombudsman assesses what is fair and reasonable, taking relevant law, rules and good industry practice into account.
For complaints referred from 1 April 2026 through 31 March 2027, the maximum compulsory money award is:
| Date of the firm's act or omission | Money-award limit |
|---|---|
| On or after 1 April 2019 | £455,000 |
| Before 1 April 2019 | £205,000 |
These are limits on the money-award component, not a ceiling on every remedy. Interest awarded on the money award, costs awards and interest on costs are excluded when calculating that maximum (DISP 3.7.5). FOS may also give non-money directions, such as correcting a credit file. If fair compensation exceeds the compulsory money limit, the ombudsman may recommend the excess, but cannot compel that additional money under the money-award rule.
A case handler may first propose a resolution. An ombudsman can then issue a reasoned final decision. If the complainant accepts it within the specified time, it becomes final and binding on both parties (DISP 3.6.6). If it is rejected, neither is bound and the complainant may choose other remedies. Acceptance is not a route to claim an additional balance in court for the same complaint. Judicial review is a narrow legality route, not a routine merits appeal by an unhappy firm.
Records, reporting and customer support
Under DISP 1.9, firms keep a record of each complaint and the measures taken to resolve it, ordinarily for three years (five years for the specified collective-portfolio-management cases). DISP 1.10, not a generic “CMOR” return, governs the applicable complaints returns to the FCA; reporting frequency and form depend on the firm and activity. Complaint trends can also inform Consumer Duty monitoring and improvements to products and support.
Firms should provide accessible complaint channels and respond appropriately to customers with characteristics of vulnerability. CONC 7 contains consumer-credit arrears and collection conduct standards where relevant; it does not create a separate universal complaint-response deadline or automatic pause of all collection activity merely because a complaint is open.
Primary sources: FCA complaint definition, DISP 1.6, DISP 2.7, DISP 3.6, DISP 3.7, DISP 1.9, and FOS compensation guidance.
For an ordinary complaint that was not resolved under the three-business-day route, what must a firm send by the end of eight weeks under DISP 1.6.2?
A final response in every case, even if investigation is incomplete
A final response or a qualifying written response explaining delay and FOS referral rights
Only an acknowledgement that the complaint was received
A court claim form if the firm disputes liability
A complaint about a 2023 act is referred to FOS in September 2026. Excluding separately awarded interest and costs, what is the maximum compulsory money award?
£100,000
£205,000
£455,000
£1,000,000
A complainant accepts a FOS ombudsman’s final decision within the stated time. What is its effect?
It binds the firm but leaves the complainant free to sue for the rest of the same claim
It binds neither party until a court approves it
It binds the complainant but not the respondent
It becomes final and binding on both complainant and respondent
Sections you finish are checked off in the contents.