The Financial Ombudsman Service (FOS) has announced new measures, aimed at streamlining and modernising the complaints process.

Following a joint consultation with the Financial Conduct Authority (FCA), it has confirmed that it will introduce changes to its operations, aimed at allowing it to focus its resources on the cases it was set up to resolve as a quick and informal alternative to the courts.

These reforms include:

• Changing the rules to provide greater clarity that its decisions are based on the standards applicable at the time of the act or omission complained about, and that the decisions will not be applied retrospectively. This provides a foundation for proposed legislative changes to the "fair and reasonable" remit which are currently progressing through Parliament.
• New powers to dismiss complaints that are not appropriate for the FOS and may be better resolved – or are already being investigated – in other ways. These include complaints that may be better suited to court, law enforcement, or another dispute resolution process, or where there has been no financial loss, or material distress or inconvenience. These will come into effect on 1 October 2026.
• A new registration stage to be rolled out next year, following a consultation on differential case fees later this year.  This is aimed at making sure that complaints referred to FOS are within scope and ready to be investigated before being allocated to a caseworker. This aims to provide a fairer funding model to better reflect costs and support earlier resolution of disputes.

Later this year, FOS will publish the first of its joint thematic reviews with the FCA to provide more insight on the types of complaints it sees and its approach to resolving them.

This aims to:

• help to inform firms' own complaints handling
• prevent similar cases from needing to be escalated to FOS, and
• demonstrate how outcomes are aligned with regulators' rules.

The changes announced are part of a wider series of steps FOS has taken to modernise its service. This includes:

• an updated memorandum of understanding with the FCA to ensure its decisions are aligned with regulatory rules
• charges for professional representatives to refer cases aimed at making sure that costs are fairer and cases are better evidenced, and
• changes to the interest rate applied to some of the awards that it makes to better reflect current economic conditions.

FOS has also been working on digital improvements, online portals for businesses and consumers rolled out and an enhanced online complaint form streamlining and simplifying the complaint journey to make its service easier for customers to use.

Legislative changes to the way the redress system and the Financial Ombudsman Service operate, are progressing through Parliament in the Financial Services and Markets Bill, which begins Report stage in the House of Lords in September.