The Financial Ombudsman Service (FOS) is considering changing its case fee structure which would see firms pay less for complaints resolved earlier in the investigation process.

The service would remain free for consumers to refer a complaint, and for charities, families and friends who may be helping them.

Currently, the FOS model means all businesses pay the same, regardless of the stage the case reaches and how much work goes into resolving the dispute. However, some firms believe this is unfair when they are settling complaints earlier in the process.

Financial firms, in addition to a levy, pay a fixed fee of £650 for every case against them that the service investigates, regardless of the stage at which the dispute is resolved. Since 1 April 2025, if the complaint is submitted by a professional representative and not upheld by the Ombudsman, this fee is reduced to £475. Most businesses receive three free cases a year.

The proposals announced today are aiming to “better reflect the effort and the cost” that the Ombudsman incurs investigating cases. The FOS also suggested they could support the early resolution of complaints.

“We are undertaking an ambitious transformation programme to reform our service and make it work for today’s economy,” commented interim chief executive at the FOS, Jenny Simmonds.

“These proposals are seeking to modernise our charges for businesses, creating a fairer funding model that is fit for the future, and which better reflects our work, while ensuring our service remains free to consumers who bring their cases directly to us.”

The latest consultation comes alongside two other consultations being run by the Treasury and by the Financial Conduct Authority and the Financial Ombudsman to look at ways to modernise the redress system. All consultations are due to close on 8 October 2025.

---