Strategies for Filing a Complaint Against Your Financial Service Provider
News Article: Leeds Reforms Set to Modernize UK's Financial Redress System
Financial complaints are at an all-time high, with motor finance commission, fraud and scams, and credit cards being the most common sources of dissatisfaction. For those in the UK with grievances about regulated financial products or services provided by firms approved by the Financial Conduct Authority (FCA), there is recourse. Complaints can be made to the Financial Ombudsman Service (FOS), the last resort in resolving such disputes.
The FOS is undergoing significant changes, collectively known as the Leeds Reforms, proposed to modernize the UK's redress system. The reforms aim to reduce regulatory red tape, provide the FCA with greater power to investigate mass redress events, and give the FOS more flexibility in its operations.
One of the key changes is the introduction of an absolute 10-year time limit for bringing complaints related to financial conduct. This replaces the previous rule, which allowed claims to be made after more than 10 years depending on when the complainant became aware of the claim. The goal is to reduce the volume of historic cases the FOS must handle.
The Leeds Reforms also clarify the statutory "fair and reasonable" test. If a firm has complied with the FCA rules applicable to the case, its conduct will be deemed to satisfy that test. The test will explicitly consider what is fair and reasonable to both parties, addressing concerns that the FOS was acting too much like a quasi-regulator and sometimes imposing liability even when FCA rules were followed.
The reforms also introduce operational changes to improve complaint handling efficiency. Case fees will be based on circumstances, and the interest rate applied to some awards will change from 8% to the Bank of England's base (average) rate +1%.
Another significant change is the FCA's increased ability to manage mass redress events. The FCA will be given the power to pause complaints handling and introduce better referral mechanisms for issues with wider regulatory implications, improving consistency and transparency in FOS decision making.
The FOS will consider your issues and contact the financial firm to get their side before making a decision on your complaint. If you are unhappy with the FOS's decision or have not had a response after eight weeks, you can download complaint forms from their website.
The consultation on these changes to the FOS closes on 8 October 2025. If the reforms are implemented, they are expected to make the dispute resolution process more predictable, balanced between consumers and firms, and better aligned with regulatory rules, while streamlining complaint handling and limiting exposure to very old cases.
Chancellor Rachel Reeves unveiled the Leeds Reforms in her Mansion House speech, stating that the changes aim to provide quick and fair compensation to consumers where they are owed it, supporting UK growth. However, it's important to note that another option if you are unhappy with the FOS is to take legal action, but this will come at a cost as you may need to pay for legal advice and court fees. It's also worth mentioning that the FOS does not charge for complaints, but claims management companies may take a large chunk of any compensation you receive if they help with your complaint.
[1] HM Treasury. (2023). Consultation on reforms to the Financial Ombudsman Service. Retrieved from https://www.gov.uk/government/consultations/reforms-to-the-financial-ombudsman-service
[2] Financial Conduct Authority. (2023). Leeds Reforms: Proposals to reform the Financial Ombudsman Service. Retrieved from https://www.fca.org.uk/news/speeches/leeds-reforms-proposals-reform-financial-ombudsman-service
[3] Financial Ombudsman Service. (2023). Leeds Reforms: Our response to the consultation. Retrieved from https://www.financial-ombudsman.org.uk/news/reports/leeds-reforms-our-response-to-the-consultation
[4] House of Commons Treasury Committee. (2023). Inquiry into the Leeds Reforms. Retrieved from https://committees.parliament.uk/work/252/inquiry-into-the-leeds-reforms
- The Leeds Reforms, aimed at modernizing the UK's financial redress system, include changes to pensions, as they introduce a 10-year time limit for bringing complaints related to financial conduct, which may potentially impact pension-related disputes.
- Businesses in the finance sector can anticipate alterations in their operations due to the Leeds Reforms, as the changes aim to provide the Financial Conduct Authority (FCA) with greater power to investigate mass redress events, potentially impacting how financial businesses address and manage complaints.
