Firms subject to the Financial Ombudsman Service need to keep up with regulatory news, especially in light of FOS fee reform and FCA redress changes. We summarise the consultations and what they mean for your business below.
What’s in the consultations?
1. FOS Differentiated Case Fee Consultation – August 2025
- Moves to differentiated case fees based on complaint stage and complexity, replacing the old flat fee.
- Firms and professional representatives receive annual monetary allowances in place of “free cases.”
- Quarterly advance payments proposed for case fees, streamlining billing.
- No expansion of FOS scope; changes focus on how costs are shared.
- Firms with higher escalation rates face more fees—quick resolutions now bring a clear financial benefit.
2. HM Treasury Review of the FOS Mandate
- Proposes to clarify and limit FOS powers, narrowing its role to impartial dispute resolution.
- Aligns the fairness test more closely with FCA rules.
- Promises more predictable complaint outcomes—less risk of new standards set by the FOS.
- Legal commentators urge firms to expect greater certainty and prepare for tighter standards.
3. FCA & FOS CP25/22: Modernising the Redress System
- Introduces more efficient handling of systemic (mass) redress events.
- Strengthens cooperation between FCA and FOS for regulatory interpretation of complaints.
- Updates include new reporting rules, complaint registration stage, and clearer mass redress criteria.
- No change to which firms are in scope, but possible changes in how complaints are categorised and managed.
Why FOS fee reform and FCA redress changes matter
With these proposals, regulated firms face new practical and financial challenges—and opportunities to improve complaint handling. Leaman Crellin can help you:
- Optimise complaint workflows and staff training.
- Understand new fee structures and redress regimes.
- Update reporting systems and prepare your teams for new requirements.
Contact us today to discuss your readiness for FOS fee reform and FCA redress changes to get ahead of the changes.
