The Financial Ombudsman Service (FOS) is consulting on charging businesses a lower case fee for complaints that are resolved early.
Firms pay a fixed fee of £650 for every case that the FOS investigates against them, regardless of when the dispute is resolved. Since 1 April this year, the fee for complaints submitted by a professional representative and not upheld has been reduced to £475.
Most businesses receive three free cases each year.
The FOS said the current structure meant all firms paid the same fee, regardless of the stage the case reached and how much work went into resolving the dispute.
The organisation said some firms found this unfair, particularly when they were settling complaints early in the process.
The FOS is consulting on differentiating case fees based on when they are resolved, and added that complaints that were closed later required more work and therefore cost more.
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It will also seek views on whether case fees should be based on the complaint outcome, as previous feedback suggested stakeholders wanted firms that had done wrong to contribute more towards the service’s costs. This could also mean firms pay less if the FOS believes the dispute has been resolved fairly internally.
Changes to free case allowance
In 2024/25, seven in 10 businesses that received complaints from customers did not pay any case fees. The FOS said that for firms that did pay case fees, the cost was usually lower than the legal costs of defending the case in court.
Further, the FOS is seeking views on the free case allowance, proposing to change this to a monetary value so businesses and professional representatives can save the same amount of money.
The dispute resolution service is also consulting on changing its payment mechanism so that the majority of businesses and professional representatives are charged quarterly and in advance. This would be based on a forecast of case volumes and give the FOS the funds it needed to resolve cases.
A transformation programme
Jenny Simmonds, interim chief executive of the FOS, said: “We are undertaking an ambitious transformation programme to reform our service and make it work for today’s economy.
“These proposals are seeking to modernise our charges for businesses, creating a fairer funding model that is fit for the future, and [that] better reflects our work, while ensuring our service remains free to consumers who bring their cases directly to us.”
This consultation is running alongside two other consultations by HM Treasury and the Financial Conduct Authority (FCA).
All consultations will close on 8 October 2025.
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