FOS outlines the next phase of ‘modernising the redress system’ service reforms

FOS has outlined in an insights article the next phase of its reforms, which are set out in a FOS Policy Statement in relation to modernising the redress system.  Changes are being introduced to transform the way FOS operates and to improve its service for consumers and firms.

• A new registration stage will ensure cases are within scope and ready to be investigated.
• New powers to dismiss complaints will focus FOS resources on the cases it was originally set up to resolve.

The measures are part of a wider package of reforms to the redress system – including legislative changes – to support confidence in financial services, so that consumers get fair and quick compensation when things go wrong, and regulated firms have more certainty to invest, grow and compete.

The reforms include:

• An amendment to rules to provide greater clarity that FOS decisions are based on the standards applicable at the time of the act or omission complained about – and will not be applied retrospectively. This provides a foundation for proposed legislative changes to the ‘fair and reasonable’ remit which are currently progressing through Parliament.
• New powers to dismiss complaints that are not appropriate for FOS and may be better resolved – or are already being investigated – in other ways. These include complaints that may be better suited to court, law enforcement, or another dispute resolution process, or where there has been no financial loss, or material distress or inconvenience. These will come into effect on 1^st October 2026.
• A new registration stage to be rolled out next year, following a consultation on differential case fees later this year, to ensure that complaints referred to FOS are within scope and ready to be investigated before being allocated to a caseworker. This will continue FOS’ work on providing a fairer funding model to better reflect costs and support earlier resolution of disputes.

Later this year, FOS will publish the first of its joint thematic reviews with the FCA to provide more insight on the types of complaints FOS sees and its approach to resolving them.  This will help to inform firms’ own complaints handling, prevent similar cases from needing to be escalated to FOS, and demonstrate how outcomes are aligned with regulators’ rules.