FOS: Changes to Limits and Eligibility – Are you Ready?
The Financial Conduct Authority (FCA) has confirmed that it intends to go ahead with its proposals to:
- increase the Financial Ombudsman Service (FOS) award limit; and
- extend the definition of an eligible complainant to include larger small and medium-sized enterprises (SMEs).
The current FOS award limit of £150,000 will change to:
- £350,000 for complaints about acts or omissions by firms on or after 1 April 2019; and
- £160,000 for complaints about acts or omissions by firms before 1 April 2019, and which are referred to the ombudsman service after that date.
Any complaints referred to the ombudsman service before 1 April 2019, will not get the benefit of the increased award limits and will remain capped at £150,000.
The new limits will apply from 1 April 2019 and will be automatically adjusted on 1 April each year to ensure that they keep pace with inflation, as measured by the Consumer Price Index (CPI) for the preceding January. The inflation-adjusted limit would be rounded down to the nearest £5,000.
What Should Firms Be Doing Now
Firms should be:
- updating their Complaints Policy;
- ensuring that complaint handling staff are aware of the increased limits and wider eligibility criteria;
- updating consumer-facing information about complaint handling procedures; and
- ensuring that the most recent version of the FOS standard explanatory leaflet is sent to client where appropriate.
If you require any further information on this important upcoming change, please contact Felicity Rowan.