The Financial Ombudsman Scheme
The idea of claiming compensation against a financial services provider has entered into the public consciousness in recent years. Whereas previously banks were seen as inviolable organisations, the recent run on a bank (the first in living memory in the UK) has le to a general weakening of confidence in the banking system. Furthermore, the discovery that the heavy charges levied by banks against their customers are illegal has led considerable numbers of individuals to attempt to claim compensation.
The Financial Ombudsman Scheme (FOS) was established to settle disputes between financial service providers and the customers of those organisations. It is a free service, established by the government. The key fact to remember about the Financial Ombudsman Scheme is that they are not a regulator or a watchdog. They have no responsibility for ensuring that the financial services industry as a whole operates according to the law; that is the responsibility of the Financial Services Authority. Rather, the FOS is charged with settling individual disputes.
The FOS's terms of reference are fairly wide. They have the power to look at complaints made by consumers within a variety of different financial fields. For example, the Ombudsman can attempt to solve disputes involving banks; mortgage providers; pension providers; credit cards; personal loans; and a number of other types of financial organisation.
It should also be remembered that a ruling of the Financial Ombudsman Scheme, while binding upon the financial organisation, does not necessarily have to be accepted by the complainant. An FOS ruling is not the same as a court ruling. Thus, if the consumer is unhappy with the decision of the ombudsman, they are free to subsequently take the case to court. As it is free to complain to the Ombudsman, this may well be the best first port of call if you believe you have a case against a financial organisation. You will not have to pay any solicitor's fees, and the organisation against whom you are complaining will have to abide by the ruling. If your complaint fails, you can then decide whether or not to continue to court.
Before contacting the FOS, your first step should always be to make a complaint directly to the organisation in question. Indeed, no bank or other organisation will want a complaint to go to the Ombudsman, and so you may well find that your case can be settled without the need for their involvement. You should, however, be prepared to persevere with this.
If this course of action fails, it is very easy to complain to the Ombudsman. You can download a copy of their complaint form from their website. It is available in a number of different formats, which you can either print off and fill in or complete on your computer and then print it. Either way, you must send a printed copy with your handwritten signature attached. The form requires you to give details of your complaint, as well as some personal details about yourself.
You may also find it useful to look through the leaflet entitled 'Your Complaint and the Ombudsman', available on the FOS website.