FOS Increasingly Upholding Mis-Selling Complaints

The Financial Ombudsman Service (FOS) is a UK government-backed body responsible for settling complaints between consumers and businesses that provide financial services, such as banks, financial advisers, and insurance providers. We frequently spotlight notable FOS decisions and updates in our blog.

FOS case handlers aim to resolve complaints based on the circumstances, facts, and evidence available in each case and will return an initial assessment. Both sides can accept the assessment or refer to an Ombudsman for a final decision if there is a disagreement. Ombudsman decisions are legally binding once the consumer has accepted them.

While independent of the Financial Conduct Authority (FCA), the body responsible for regulating financial services firms in the UK, FOS does follow the rules set out in the FCA handbook and considers the applicable laws, codes, and good practices at the time of the complaint.

Typical FOS applications take around 90 days, but more complex cases or those referred to an Ombudsman for a final decision can take much longer. TLW Solicitors has a specialist team of lawyers experienced in taking claims to the Financial Ombudsman Service and understands the required information needed, technical jargon used, likely timescales, and how to handle any challenges.

The data released by Oxford Risk shows that FOS claims relating to financial mis-selling and advice suitability against financial advisers are both increasing in volume and being more frequently upheld by the service.

Figures for 2022/23 show that 884 complaints were resolved by FOS, with 62% (548) being upheld in favour of the complainant. This is a steep increase from 2021/22, during which 570 complaints were resolved with an uphold figure of 49% (279).

Greg Davies, Head of Behavioural Finance at Oxford Risk, commented on the data:

“We expect to see record numbers of mis-sale and suitability of advice complaints upheld in 2023/24. The regulatory trajectory and directives from the Financial Conduct Authority, such as the new Consumer Duty, show a growing focus on client investment suitability. Firms that seek to address the regulation in the spirit in which it is meant by following this trajectory will be better positioned to avoid these complaints than those that treat it merely as a tick-box exercise.”

The Consumer Duty, introduced by the FCA in 2023, is a series of new rules ensuring that financial services providers offer their consumers:

• the support they need when they need it
• communications they understand
• products and services that meet their needs and offer fair value

The introduction of the Consumer Duty has also seen the FCA crackdown on regulated firms offering unsuitable advice and mis-selling products. We recently covered the news that wealth management firm St James’s Place (SJP) is going to overhaul its fee structure – scrapping controversial exit fees, capped advice fees, and fund charges. As a result of the Consumer Duty rule changes, SJP has earmarked over £425 million to cover client complaint compensation and refunds.

If you or a loved one have engaged with a financial adviser and think you may have been mis-sold a financial product, or received advice that was not suitable for your circumstances and has affected you financially, speak to TLW Solicitors’ experienced financial mis-selling team.

Working on a ‘no win – no fee’ basis, TLW’s experienced financial mis-selling lawyers can help you through the compensation process, whether this is settled in the early stages directly with your financial adviser or with FOS.

TLW Solicitors’ team has extensive experience successfully taking cases to FOS and securing client compensation, even if they have been knocked back previously.

Sarah Spruce, Legal Director and Head of the Professional Negligence department at TLW Solicitors, commented:

“It is clear from the FOS figures that we are starting to see a significant crackdown on the advice and recommendations financial advisers give to their clients. Clients enter these relationships with the assumption that their adviser is looking out for their best interests, but in many complaints – including cases we have dealt with – this is not always the case, and reparations must be made.

Given my team’s experience of these cases, I would not be surprised to see these figures continuing to rise over the coming years, and it is encouraging to see victims of mis-selling and unsuitable advice receiving the compensation they are due.”