How we make decisions

We have a duty to resolve complaints based on what we think is fair and reasonable in all the circumstances of the case.

We were set up as an informal and free alternative to the courts. To use our service, you don't need to make your case in person. And there’s no “cross-examination”, where both sides ask each other questions. 

We’ll sort things out over the phone, by email or post – depending on what suits you.

Unlike a court, you generally don’t need anyone to represent you. If you’d prefer, we can talk to a member of your family, a friend or someone else who you’ve asked to help you complain.

Our powers are set out in Part XVI and Schedule 17 of the Financial Services and Markets Act 2000. We take into account the law, codes and good practice that applied at the time of the event. We also follow the rules in the Financial Conduct Authority's (FCA) handbook, although we’re operationally independent of the regulator.

We make decisions on the facts and evidence available in each case. Either side can tell us what they remember saying or being told. Written evidence or paperwork from the time is often very helpful. But if it isn’t available, it doesn’t mean we’ll automatically uphold or reject a complaint. The right outcome in one case may not be the right outcome in another as individual circumstances can vary so much. And, the decision we come to on what is fair and reasonable in all the circumstances of the case may be different to what a court would decide applying legal rules. 

If you're a consumer, you don't have to accept what we say about your complaint, and you can withdraw from our process at any stage, before the final decision is issued. However, if you do choose to withdraw from our process you are unlikely to be able to revive your complaint with the Financial Ombudsman Service. 

The rules are different for financial businesses. If a consumer accepts our final decision, then the decision is legally binding on the financial business. It can't simply withdraw from the process. 

In most cases, a case handler will initially provide their assessment of the complaint. To do this, they will review everything you and the business have said and the paperwork that has been provided. They will then share their assessment of the complaint with both sides and recommend how it could be resolved. 

The case handler's assessment will explain the reasons behind their conclusion and the recommendation they have made to resolve the complaint. Both you and the business will be given a reasonable time in which to confirm whether you agree or disagree with what the case handler has recommended. 

At this point, if both you and the business agree with what they've said, the complaint is settled. Most of the cases we see are resolved at this stage. 

You may be asked to confirm that you are accepting any compensation recommended by the case handler in full and final settlement of your complaint. Accepting any compensation may mean you won't be able to the pursue the business in court for the same complaint. You may want to consider taking independent legal advice if you are unsure about accepting.

If you don't agree with the case handler's assessment, you need to tell them your concern as soon as possible. The case handler will consider anything further you have to say, and this may change their assessment, or it might stay the same – they will tell you either way. 

If you or the business don't accept the case handler's assessment, you can ask for your case to be referred to an ombudsman. 

The ombudsman will then look at all details of your complaint afresh and make a decision. As part of this process the ombudsman may decide to issue a provisional decision which will set out the decision he/she is minded to make on your case. This will usually be because the ombudsman is thinking of reaching a different outcome or using different reasoning from the initial findings.

The ombudsman will then give both parties a reasonable time in which to make any final representations on your case. After this time the ombudsman will consider any further submissions he/she receives before either:

• deciding your case has been resolved and closing it, or
• issuing a final decision on your case. 

The ombudsman will issue their final decision to both parties in writing. You will then be asked to confirm by a specified date whether you accept or reject it. If you accept the ombudsman's final decision in the specified timeframe, the business has to do what the ombudsman has told them to do – it will be binding on the business. This might, for example, include making the business pay you compensation. And, if you accept the final decision, it is unlikely you will be able to pursue the business in court for the same complaint. 

If you don't want to accept the ombudsman's decision, you don't have to. But it does mean our involvement has come to an end and the business doesn't need to do anything. You may still be able to take legal action against the business, but we won't be involved in this. And, if we don't hear from you within the specified timeframe, then in most cases you will be treated as having rejected the decision and it will not be binding on the business. 

If either side is unhappy with the decision, they can't appeal an ombudsman's final decision to another ombudsman. You also can't go to court to appeal the ombudsman's decision just because you disagree with it. 

However, we're a public body and we can be judicially reviewed. A judicial review usually focuses on the process an ombudsman has used to make their decision, not on the facts and evidence of the dispute itself. You'd probably need to get legal advice before starting judicial review proceedings. 

Our rules are flexible and there might be some cases where after a provisional decision has been issued, the parties may agree to settle the complaint at that stage, sometimes on the basis proposed in the provisional decision or otherwise. If you agree to compensation offered by a business at any stage, this may mean you won't be able to pursue the business in court for the same complaint. You may want to consider taking independent legal advice if you are unsure about agreeing to a settlement. 

Our case handlers and ombudsmen are appointed to settle disputes fairly and reasonably – they have a wide range of technical, academic and professional qualifications and experience. And while a financial background is useful, investigators and ombudsmen are appointed to settle disputes because they have the ability to listen to all sides of the story and arrive at decisions fairly.

We were set up by Parliament to resolve disputes fairly, reasonably, quickly and with minimum formality. The rules and legislation that give us our powers to resolve complaints let us set timescales to help progress cases efficiently – and to get answers to our customers as quickly as possible.

To help us deal with cases promptly, it is important that our customers (both consumers bringing a complaint and financial businesses responding) provide us with information as soon as possible when we ask for it. We will ask you to reply to our enquiries or requests for information by a particular date, and usually within two weeks. If we do not hear from you by the deadline we’ve set, we can move a case on to the next stage of our process – this could mean, for example, that we issue findings based on the information we have available, or that we treat the complaint as withdrawn and close the case in the absence of a response.

If you think you will have difficulty meeting a deadline, it is important that you let us know straight away. In some circumstances we may be able to give you more time to reply, but we’re unlikely to agree to extra time where, for example, we believe the information we’re asking for is something that should be readily available.

We take a number of factors into account when deciding on the timescales we set, and whether we agree to more time to respond. We need to balance the request with the subject matter of the complaint, and the circumstances of the parties involved - and that both sides will usually want to know as soon as possible how and when their case will be resolved.

As an alternative to the courts, we resolve things over the phone and in writing. We settle most of our cases informally in this way. We don’t ask you to discuss your complaint face to face and we don’t usually need hearings to resolve a dispute.

You can read more about what to expect when you bring a complaint to us.

We aim to give answers to complaints within 90 days of receiving the complete complaint file. 

This is in line with the EU directive on Alternative Dispute Resolution (ADR) which says we should try to give an answer on cases within 90 days. 

Sometimes, a case handler may be able to give you an answer quicker than this. And, if both sides agree to a case handler's assessment and recommendations, we can often resolve a case in a few weeks. 

If the case can't be resolved by a case handler, then the process takes longer, as an ombudsman has to carry out a formal, detailed investigation. 

Longer timescales for PPI claims and complex cases

Over 1.3 million people have asked for our help with PPI complaints. This is an unprecedented number of complaints for us to deal with and many are waiting longer than we'd like. We're able to give some people an answer within 3 months, but for most, it's still likely to take us longer than 90 days to give an answer about a PPI complaint. 

Other types of cases will take longer than 90 days, we'll write to the customer and business to let them know how long it will take. 

If a consumer has lost out financially, we’ll aim to put them back in the position they would have been in if the financial business complained about hadn’t made a mistake.

We can ask a financial business to pay compensation, and we might decide they should also pay costs and interest on top of this.

There’s a limit to how much we can tell a business to pay. If we think  compensation should be higher than our award limit, we can recommend that the financial business pays more. But we can’t make them pay anything over the limit. It is up to them whether they pay any extra or not.

You can read case studies about people who have complained to us and how we helped settle their disputes.

You can also read about cases where the ombudsman has issued a final decision in our database of decisions.