Apr 20 – Reserving judgement on FOS

AMI has waited patiently for an update on FOS’ 2020/21 consultation, which arrived via a statement on, of all days, April Fool’s day with the final budget and summary of consultation feedback to follow.  Yet it would be foolish to think that this is a fair outcome, especially as FOS has ignored many of the suggestions that AMI had proposed.

Crucially, FOS is continuing to apply the increased case fee of £650 for cases closed after 1 April 2020 – this is regardless of when the case was referred to them.  AMI’s suggestion was to apply a fairer and more transparent approach of applying this to complaints received after this date, as the timescale for adjudication is often with FOS and not the firm in question.

Whilst some press headlines have commented on the savings for firms and that FOS has understood the financial pressure firms are under by asking the FCA to freeze all minimum levies at 2019/20 levels, this is a false economy as FOS is utilising their reserves which will need to be topped up in the future.  This will cost all firms.  So, although this provides some temporary respite which is welcomed, it doesn’t address the fundamental shift away from a polluter pays model.

It is positive that case fee exemption will remain at 25 for firms as this benefits all (but will assist mortgage networks less as the number of cases applies to each authorised firm and not an appointed representative). It will also give some reassurance to firms who have seen an increase in DSARs (Data Subject Access Requests) from Claims Management Companies that they can fight frivolous claims with confidence.

Now is more important than ever for FOS to engage with all industry sectors. There will be an increased demand on its services during these unprecedented times and much to learn from and share.  AMI welcomes regular updates and insight from the service, as it’s crucial that the financial services industry collaborates and communicates to get through these tough times together.


Robert Sinclair, AMI
April 2020