Financial Ombudsman Service consults on changes to its case fees

• Following stakeholder feedback, we’re consulting on whether to change case fees, with businesses paying less for complaints which are resolved at an earlier stage.
• The proposal forms part of the organisation’s wider transformation to ensure it is fit for the future.
• We will remain free for consumers to refer a complaint, and for charities, families and friends who may be helping them.

Feedback from stakeholders from previous consultations has called for us to differentiate our case fees for businesses. The proposals announced today aim to better reflect the effort and the cost we incur investigating cases and could support the early resolution of complaints.

We’re a not-for-profit service, with financial firms currently paying a levy to contribute to our costs. Firms also pay a fixed fee of £650 for every case against them we investigate, regardless of the stage at which the dispute is resolved. Since 1 April 2025, if the complaint is submitted by a professional representative and not upheld, this fee is reduced to £475. Most businesses receive three free cases a year.

The current model means all business pay the same, regardless of the stage the case reaches and how much work goes into resolving the dispute. Some businesses believe this is unfair when they are settling complaints earlier in the process.

The consultation announced today is seeking views on the proposal that businesses’ case fees are differentiated based on the stage at which a case is resolved. Complaints that are closed later in the process require more work and therefore cost more than those which are resolved earlier.

Jenny Simmonds, Interim Chief Executive said:

We are undertaking an ambitious transformation programme to reform our service and make it work for today’s economy.

These proposals are seeking to modernise our charges for businesses, creating a fairer funding model that is fit for the future, and which better reflects our work, while ensuring our service remains free to consumers who bring their cases directly to us.”

To ensure it considers all options, we are also consulting on whether case fees should be differentiated based on complaint outcome.

Previous feedback from stakeholders has called for a stronger “polluter pays” model where those firms found to have done something wrong contribute more towards our costs. This option would see firms pay less if we feel they have already resolved the dispute fairly themselves.

In 2024/25, seven in ten businesses whose customers referred complaints to us did not pay any case fees at all. For financial businesses that do pay case fees, the cost involved is likely to be much less than the legal costs of defending the case in court.

We are also seeking views on a change to the free case allowance. The introduction of charging for professional representatives now means the value of free cases can differ. Changing the free case allowance to a monetary value would allow all respondent businesses and professional representatives to save the same amount of money.

Also included in the proposals is a move to change our payment mechanism to charge the majority of businesses and professional representatives quarterly and in advance. This would be based on a forecast of case volumes, with a mid-year check and end of year adjustment for accuracy. This would give the service the funds required to work cases while also ensuring business and representatives have a more predictable cash flow through the year. 

The consultation comes alongside two other consultations being run by HM Treasury and by the Financial Conduct Authority and the Financial Ombudsman to look at ways to modernise the redress system.

All consultations will close on 8 October 2025.