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Compensation for financial loss

If you’ve lost out financially, we’ll look to put you back in the position you’d be in if the business hadn’t got it wrong.

How we calculate this compensation depends on what the complaint is about and your individual situation. We can also consider compensation for distress or inconvenience if the business’s mistake has had some other impact on you.

Last updated: 27 September 2022
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  1. The money we can award
  2. Calculating compensation
  3. How compensation is paid
  4. Compensation for distress or inconvenience
  5. Find out more

Complaints we can help with

Find out how we resolve complaints about different types of financial product or service.

The money we can award

If you’ve lost out financially, we can tell the business to compensate you for the loss it caused. Where it’s clear how much you lost, we’ll tell the business how much money it needs to pay. For example, if you paid a fee on your account that you shouldn’t have, we might tell it to refund that amount.

There’s a limit to how much we can tell a business to pay. If we think you’re due more than this we can recommend that it gives you any additional amount, but we can’t make the business pay it. We’ll talk to you both about what this means at the time.

Compensation can also include interest.

Calculating compensation

Where it’s not clear how much you’ve lost, we’ll usually say how we think the business should calculate the compensation, rather than telling it a specific amount. For example, if you were mis-sold PPI on your credit card, we might ask the business to work out how much you’d owe if you hadn’t paid for the insurance.

Or a business may have advised you to open an investment or bank account that wasn’t right for you. We can tell it to work out any compensation by looking at what your money would be worth now if you hadn’t followed its advice. For example, this might be the position you’d be in if you’d left the money where it was.

Although we tell businesses how to calculate compensation, we won’t usually need to check the individual calculations.

How compensation is paid

Most of the time, we’ll tell the business to pay any compensation directly to you.

But there may be exceptions. For example:

  • if you owe money to the business, we might say it’s reasonable for it to offset any compensation against the debt
  • if you’re insolvent, we may say the business needs to pay the compensation from your complaint to the trustee or practitioner of your insolvency arrangement

Compensation for distress or inconvenience

A business’s mistake can affect you practically or emotionally, not just financially. For this reason, the rules we follow say that we can award fair compensation to recognise other types of impact, for example the distress, inconvenience or other practical problems caused by the dispute. 

Find out more about when we award compensation for distress or inconvenience.