Bridging the Gap: Consumer awareness of the Financial Ombudsman Service

Summary

Our latest research explores how familiar consumers are with the Financial Ombudsman Service (FOS). It looks at how many people have heard of the FOS and, for those who have, what they actually know about the role it plays. The key findings are:

• Most people have heard of the FOS, especially those who have made financial complaints. It indicates that people find out about the FOS precisely when they need it  - when they’re making financial disputes. 
• Many people haven’t needed (or thought they haven’t needed) to use the FOS, despite having heard of the service. This is because their complaints were resolved before needing its support, and suggests the initial complaint process is effective.
• One in ten people who did not use the FOS for their financial complaint didn’t realise it could help with their specific issue.

 Background

The Financial Ombudsman Service (FOS) is an independent public body set up by parliament to sort out complaints between financial businesses and their customers in a fair and impartial way. In Q1 of 2024/25, the FOS received 74,645 new complaints, 70% more complaints than the year before. They also upheld 37% of the cases they resolved in favour of the consumer.

Which? has previously researched the prevalence of distress, inconvenience and delay cited by the Financial Ombudsman as reasons for upholding complaints. Additionally, Which? has also examined fraud victims’ experiences, finding that around a third (32%) of fraud victims reported that they did not make a complaint to the FOS because they weren’t aware of it. This new research looks at how the UK public views the FOS, including how many people are aware of it, who understands its role, and who uses the service. 

Most people know about the FOS, especially if they’ve made a financial complaint

The Financial Ombudsman Service is an independent public body set up by Parliament to sort out complaints between financial businesses and their customers in a fair and impartial way. The vast majority of respondents (net 83%) said that they were aware of the FOS and had heard of the name before taking part in this research.

Consumers' awareness and use of the FOS

We suspected that although people had heard of the FOS, not everyone would know exactly what the FOS did, so we aimed to differentiate between those who are just aware of the FOS, and those who are aware of it and know what the service offers. To do this, we tested those who were aware of the FOS but had not used it, by asking respondents to pick one statement from four that correctly identified what the FOS does. We found that not everyone could accurately say what the FOS did, with only 63% of these respondents correctly answering the question. This suggests a gap between awareness of the FOS and a true understanding of its role.  

Despite a lot of people knowing about the FOS, and some people knowing about the service it offers, there were people who said they didn’t know about it. Our research found that almost one in five (18%) respondents were not aware of the FOS. 

Gen Z adults are less likely to be aware of the FOS compared to their older counterparts (50% of 18-24 year olds compared to 5% of over 55 year olds). This is perhaps not surprising, as older adults have more experience with financial products, making them more likely to be aware of the FOS. 

People making financial complaints and using the FOS

In the UK, financial companies are required by the Financial Conduct Authority (FCA) to inform consumers about their right to escalate complaints to the FOS. This regulation ensures that consumers are aware of their options if they are not satisfied with how their complaint is handled by the company. Specifically, firms must include details about the FOS in their final response letters to complainants, as well as in any holding responses that are sent if the complaint is not resolved within eight weeks. This helps ensure that consumers know they have a further avenue for redress if needed.

In our research, only 13% of respondents had used the FOS (for inquiries or complaints) as of May 2024 - this related to an estimated 6.7 million people who have ever used the FOS services. 

One in five (22%) respondents said they had made a financial complaint and, reassuringly, over nine in ten (93%) of those said they knew of the FOS. Most of these consumers were likely informed about the FOS by the financial company during their complaint. However, a small number may not have been made aware. It’s unclear if this was due to the company failing to inform them or if the consumer simply missed the information. 

Two thirds of people didn’t need to use the FOS because their complaint was successfully resolved

Our research found that two in five (42%) respondents who had made a financial complaint did not use the FOS. When asked why, two thirds (66%) of them said that this was because their complaint was successfully resolved without having to go to the FOS. This suggests that the initial complaint resolution processes can be effective for a large number of cases, reducing the necessity for escalation. 

Interestingly, consumers younger than 55 were less likely to have their financial complaint resolved before involving the FOS, than their older counterparts. Only 62% of those under 55 had their complaint resolved compared to 77% of those over 55. Our research suggests that younger consumers are more likely to need the FOS because financial companies are less likely to resolve their complaints. 

Consumers' whose complaints were successfully resolved before needing the FOS, by age

Younger people were also less likely to know about the FOS or that they could use the service for their specific issue (15% of under 55 year olds compared to 0% of over 55 year olds). This means that the group most likely to need the FOS is also the least aware of it. 

  Some consumers didn’t use the FOS because they didn’t know the service could help them

 The vast majority of consumers who didn’t use the FOS for their complaint were aware of the service but simply didn’t need to use it. However, one in ten (9%) did not use the FOS because they didn’t know it could help with their specific issue (this statistic comes from a small sample where a total of 157 people answered the question overall). While many consumers have heard of the FOS, some lack a clear understanding of when and how to use it. This can prevent consumers from accessing support when they need it most. When making a financial complaint, consumers should be informed about the Financial Ombudsman Service (FOS) by the company they are complaining about. Our research may suggest that these communications are not always sufficiently informing all consumers as intended.

Reasons why consumers' don't use the FOS

We also found that nearly 1 in 10 (9%) respondents with unsuccessful complaints chose not to escalate to the FOS, believing it would take too much time or be too much hassle. This perception creates a significant barrier to fair outcomes and highlights the need for better support and clearer communication around the FOS process. 

‘’I thought it would be an unnecessary hassle of going through the process.’’  Female, 23, London 

‘’It was not worth the hassle and I was not really sure about doing it’’  Male, 41, East of England

‘’It was with a really big company and I felt I wouldn’t win against them and didn’t want to put all the time into it.’’ Female, 36, South West

A few consumers are not aware, nor confident, about their ability to make financial complaints.

Not all consumers realise they can make a financial complaint when things go wrong. In fact, one in six (16%) had never made a complaint or heard of the FOS and, of these people, three in four (77%) weren’t aware that they even had this option of making a financial complaint. When we asked this group how confident they were in seeking help to dispute a financial claim in the future, half (49%) admitted that they did not feel confident - see Figure 4. Consumers need to be empowered to take that first step in seeking help and being able to dispute a claim whenever necessary.

 Consumer confidence in seeking help when disputing a financial claim

Conclusion

Our research suggests that most consumers will be made aware of the FOS when they need it during a financial complaint. However, it shouldn’t be taken for granted that consumers will inevitably make this step when encountering a financial dispute. Low reported confidence in seeking help when disputing a claim suggests that many consumers may need to be empowered to make this step. 

Additionally, whilst general awareness of the FOS may not be a huge cause of concern, a lack of awareness of what the FOS can help with, and worries about the process being a hassle, prevent some consumers using the FOS. Greater awareness of the specific issues that the FOS can deal with, and challenging perceptions of hassle can be useful in encouraging greater use of the service. Especially, amongst younger age groups who are more likely to need to use the FOS but are less aware of it. 

Consumers can become aware of an issue that has affected them and be supported to make a complaint by charities, professional representatives and claims management companies. Whilst we share the FOS’ concerns about poor quality complaints submitted by professional representatives and CMCs, and with the levels of fees charged to consumers, there needs to be greater research into which type of consumers use these companies, and why. This, for example, will help the FOS to better understand the potential impact of its recent proposals to charge a case fee to professional representatives and CMCs, helping to ensure that some consumers are not marginalised.

Methodology

The fieldwork was conducted by Yonder on behalf of Which? between 1st and 3rd of March 2024. A sample of 2,110 UK adults were surveyed online and weighted to be nationally representative. The estimated 6.7 million people using the FOS was made based on 265 consumers reporting to have ever used it out of a sample of 2110 (13%). This proportion (13%) was multiplied by ONS estimates of population (53,646,829).