Financial Ombudsman Service (FOS) consultation on its Plans and Budget 2025-26 - Which? response

We are pleased that the Financial Ombudsman Service (FOS) has improved its performance across some metrics over the last year - for example, closing almost 20% more cases in the first seven months of 2024/25 than it did in the same period in 2023/24. That it has done so while maintaining quality scores is positive. However, performance has fallen in some areas, for example ‘complaints resolved within 3 months of conversion’ has fallen from 58% in 2023-24 (actual) to 52% in 2024-25 (latest forecast). We support FOS’s efforts to make further improvements over 2025-26, and our response seeks to assist the organisation in continuing this positive trajectory. 

Our main points are: 

• The FOS must be sufficiently flexible to deal with uncertain levels of demand. It is always difficult to forecast future demand, but the current situation appears particularly unpredictable given plans to charge for cases brought by Professional Representatives (PRs), as well as the currently unknown impact that legal decisions on motor finance may have. In this context, it is important for the FOS to be able to mobilise resources quickly and efficiently.
• There are a number of additional factors we think should be taken into account when forecasting complaint levels. These include the potential for recent developments in relation to motor finance commission to have wider application to other products / services, and the continued battle against fraud and scams including the potential consequences for complaints of the introduction of the mandatory reimbursement regime for APP fraud.
• The FOS should consider sharing longer-term forecasts and planning. There may be merit in sharing high-level forecasts and plans beyond 2025-26 since there are several issues (e.g. motor finance commission, Buy Now Pay Later) which could have a significant impact on the level of complaints being referred to the FOS - and which should therefore be factored into decisions about building sufficient resources over the coming year - but which may not impact in 2025-26.
• The FOS should continue to seek to improve and enhance the information it publishes about case decisions. The FOS publishes lots of useful information about complaints and decisions. However, there is more it could do to shine a light on where 1 financial services providers are falling short. For example, it could publish not just uphold rates for different products but more detailed metrics on the reasons why complaints are upheld to improve visibility of issues affecting consumers.  
• The FOS should expand efforts to make it more accessible to consumers. We welcome efforts to raise awareness and to smooth processes for consumers bringing a complaint, but we think the FOS should do more to make it more accessible to all consumers including those who may not be comfortable using digital / online processes. We also think there would be merit in FOS carrying out work to consider the reasons why some consumers do not currently refer their complaints to it, why some consumers prefer to use a PR and what the FOS could learn from this to inform its own efforts to extend its reach to those who are currently reluctant to use it directly.