How we make decisions

We have a duty to resolve complaints based on what we think is fair and reasonable in all circumstances of the case.

We were set up as an informal and free alternative to the courts. To use us, you don't need to make your case in person. And there’s no “cross-examination”, where both sides ask each other questions; any hearings that do take place are more informal than a court hearing.

We’ll sort things out over the phone, by email or post – depending on what suits you.

Unlike a court, you generally don’t need anyone to represent you. If you’d prefer, we can talk to a member of your family, a friend or someone else who you’ve asked to help you complain.

Our powers are set out in Part XVI and Schedule 17 of the Financial Services and Markets Act 2000. We take into account the law, codes and good practice that applied at the time of the event. We also follow the rules set out in the Financial Conduct Authority's (FCA) handbook, although we’re operationally independent of the regulator.

We make decisions on the facts and evidence available in each case. Either side can tell us what they remember saying or being told. Written evidence or paperwork from the time is often very helpful. But if it isn’t available, it doesn’t mean we’ll automatically uphold or reject a complaint. The right outcome in one case may not be the right outcome in another as individual circumstances can vary so much.

If a small business complains to us about a financial business, a case handler will look at the complaint and then share their initial assessment with both sides.

They’ll explain which points are most relevant so that each side has a chance to raise new points or ask us to look again at certain points. If you don’t agree with this initial assessment, you need to tell the case handler your concerns as soon as possible. 

If you’re still not happy with what the case handler thinks, you can ask an ombudsman to carry out a formal review of your case.

Initial assessments aren’t the same as final binding decisions. However, we’re able to resolve most complaints informally at this stage.

If a case is formally referred to an ombudsman, they’ll review all the facts and evidence. They make a decision based on what’s fair and reasonable and then put the decision in writing to both sides.

If you’re a small business, you don’t have to accept the final decision, and you can withdraw from our process at any stage. And if you don’t accept our decision, you can take the dispute to court instead, if you prefer.

The rules are different for financial businesses. If a small business accepts our final decision, then the decision is legally binding on the financial business. It can’t simply withdraw from the process.

If either side is unhappy with the decision, they can’t appeal an ombudsman decision to another ombudsman. You also can’t go to court to appeal the ombudsman’s decision just because you disagree with it.

However, we’re a public body and we can be judicially reviewed. A judicial review usually focuses on the process an ombudsman has used to make their decision, not on the facts and evidence of the dispute itself. You’d probably need to get legal advice before starting judicial review proceedings.

Case handlers and ombudsmen are appointed to settle disputes fairly and reasonably – they have a wide range of technical, academic and professional qualifications and experience. And while a financial background is useful, case handlers and ombudsmen are appointed to settle disputes because they have the ability to listen to all sides of the story and arrive at decisions fairly.

As an alternative to the courts, we resolve things over the phone and in writing. We settle most of our cases informally in this way. We don’t ask you to discuss your complaint face to face and we don’t usually need hearings to resolve a dispute. 

You can read more about what to expect when you bring a complaint to us.

How long it takes to resolve a complaint can depend on how complex it is – and how long it takes to get all the information we need. If there's just been a misunderstanding we can often sort things out very quickly. If things are more complex it may take longer.

Time limits affect whether we can or can’t help with a complaint.

You need to contact us within 6 months of the date of a financial business’s final response to their complaint. After 6 months, we won’t be able to help unless:

• the delay is due to exceptional circumstances
• the financial business agrees to us being involved
• the financial business didn’t tell the customer that they should contact us within 6 months

In addition, we normally can’t look at complaints relating to events that happened more than 6 years ago. In these cases, we can only help if you made their complaint within 3 years of becoming aware (or when you should reasonably have become aware) you had reason to complain.

If your small business has lost out financially, we’ll look to put it back in the position it would be in if the financial business hadn’t made a mistake.

We can ask a financial business to pay compensation, and we might decide they should also pay costs and interest on top.

There’s a limit to how much we can tell a business to pay. If we think that compensation should be higher than our award limit we can recommend that the financial business pays more. But we can’t make them pay anything over the limit. It is up to them whether they pay any extra or not.