Question to the HM Treasury:

To ask the Chancellor of the Exchequer, when she plans to conclude the review into the Financial Ombudsman Service.

On 15 July the government set out the conclusions and next steps of the Economic Secretary’s review of the Financial Ombudsman Service (FOS), which can be found here: https://www.gov.uk/government/consultations/fs-sector-strategy-review-of-the-financial-ombudsman-service

The review concluded that in the majority of cases, the FOS fulfils its role as a simple, impartial dispute resolution service. However, in a small but significant minority of cases, the FOS is acting as a quasi-regulator. To stop this the government is now consulting on a package of reforms to the FOS, to improve the regulatory coherence between the FOS and the Financial Conduct Authority (FCA) and provide greater certainty and predictability for firms and consumers.

The review also concluded that the FOS should retain the ‘Fair and Reasonable’ test for determining cases. The government is proposing to adapt the test to align it more closely to the FCA’s rules where, as the UK’s dedicated conduct regulator for financial services, the FCA has an objective to ensure an appropriate degree of protection for consumers and continues to prioritise fighting financial crime.

The government is committed to ensuring the FOS continues to provide customers with a cost-free route to easily resolve disputes with firms, including in cases relating to fraud.