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Changes to the Financial Ombudsman Service (FOS) and complaints procedures

Changes to the Financial Ombudsman Service (FOS) and complaints procedures

From 1st April 2019, the definition of those eligible to refer complaints onto The Financial Ombudsman Service (FOS) is being increased.

The current definition of an Eligible Complainant is:-
• Consumers
• A charity which has an annual income of less than £1,000,000 at the time the complainant refers the complaint to the respondent
• A trustee of a trust which has a net asset value of less than £1,000,000 at the time the complainant refers the complaint to the respondent
• A CBTL consumer.
• A Micro Enterprise which is a firm that employs fewer than 10 people and has an annual turnover or balance sheet of less than €2,000,000.

From 1 April 2019 the definition of eligible complainant will be;-
1) A consumer
2) A micro enterprise
3) A charity which has an annual income of less than £6,500,000 at the time the complainant refers the complaint to the respondent
4) A trustee which has a net asset value of less than £5,000,000 at the time the complainant refers the complaint to the respondent
5) A CBTL consumer or
6) A small business at the time the complainant refers the complaint to the respondent To be a Small business you must fall below the following turnover threshold and either the balance sheet OR headcount threshold:-
a. annual turnover of £6,500,000
And
b. Annual Balance sheet total of £5,000,000 or
c. Headcount of 50 people
7) A guarantor only to the extent that the complaint arises from matters relevant to the relationship with the respondent

The FCA is also looking to increase the maximum binding award limit from £150,000 to £350,000. This is the maximum amount the FOS can make a financial provider pay, however, the FOS can recommend they pay more. The award limit will be adjusted each year in accordance with the Consumer Price Index (CPI).

The FOS fees income will be changed at the next return you have due after 1st April 2019 (note, more income will now be eligible and therefore you will have increased FOS charges). Please ensure those handling complaints are made aware of these changes.

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