The UK Financial Ombudsman Service (FOS), tasked with providing dispute resolutions between financial and insurance firms and their customers in the UK, has announced an increase in the number of funds that can be awarded in cases where the Ombudsman upholds a complaint.
The award limit is the maximum amount FOS can require a financial service firm to pay and is adjusted each year for inflation based on the Consumer Prices Index (CPI). The new limits are set out as follows:
- From April 1, 2020, the award limits will change to £355,000 for complaints referred to FOS on or after April 1, 2020, about acts or omissions by firms on or after April 1, 2019.
- For complaints about acts or omissions by firms before April 1, 2020, and which are referred to FOS after that date, the limit will remain at £160,000.
- For complaints referred to FOS between April 1, 2019, and March 31, 2020, about acts or omissions by firms on or after April 1, 2019, the limit will be slightly lower at £350,000 and for any complaints referred to FOS before April 1, 2019, the limits will remain at £150,000.
While the limits set out above are substantial, traders and investors may seek alternatives to resolve their situation, including mediation or external dispute resolution services, such as the Financial Commission. The latter has a limit on complaint award amounts up to $1 million, which is roughly 2x the amount allowed by the UK Ombudsman service.