28 Nov FCA to increase number of firms who can access FOS
The FCA have announced plans to enable more SME (small to medium enterprise commercial) firms to have access to the Financial Ombudsman Service in the event of a complaint not being fully satisfied by a broker. This is estimated to give an additional 210,000 firms access to the FOS with effect from 1st April 2019, if the changes go ahead. This will also lead to an increase in the FOS fees payable as more broker revenue will be caught by the uplift in eligible complainants declared on the Gabriel return. To read the Policy Statement 18/21 please click here
The changes will mean that SMEs with an annual turnover below £6.5 million and fewer than 50 employees, or an annual balance sheet below £5 million will now be able to refer unresolved complaints to the FOS. There is also a Consultation Paper 18/31 (CP18/31) which proposes to raise the maximum amount of compensation firms may be asked to pay out from £150,000 to £350,000.
The proposal is that from 1 April 2019, the current award of £150,000 should lift to £350,000 for complaints received on or after 1 April 2019 and £160,000 for complaints that related to before 1 April 2019, but were lodged after that date. For any complaints referred to the FOS before 1 April 2019 the limit will remain at £150,000. The consultation period for CP18/31 closes on 21 December 2018 so please ensure you respond if you feel the compensation fees should not be increased, click here to see CP18/31.