On 23 May 2024, the Financial Ombudsman Service (FOS) published a Consultation Paper setting out proposed changes to its fee structure, following the introduction of legislation in Parliament. The Government has begun the process of exercising powers given under the Financial Services and Markets Act 2023 to allow the FOS to update its current fee-charging framework. This will allow the FOS to charge claims management companies(CMCs) and other relevant professional representatives to lodge a case.   

Under the proposals, consumers would continue to be able to bring cases to the FOS free of charge, but cases brought by CMCs or professional representatives would qualify for the new fees. Businesses responding to a complaint currently pay £650 per case, irrespective of the outcome of the investigation. The changes seek to make the fee model fairer by recovering some of the FOS’s costs from CMCs and representatives as well as financial services firms.

As is the case for financial services firms, all professional representatives will be allowed three free cases a year, and beyond that they will be charged a £250 fee – reduced to £75 if the consumer’s complaint is upheld. Under the proposals the FOS will not benefit either way from decisions: if it does not uphold the complaint, the higher fee collected will be used to reduce the fee for the financial business against which the complaint was initially raised.

The consultation closes on 4 July 2024. The FOS confirms that all feedback and supporting evidence will be considered carefully before proposals are finalised in Autumn 2024.