The difference between FOS and the FSCS

FOS is able to help if you have a complaint against a firm or business that hasn’t gone out of business. If you are unable to resolve the issues between you and the business the FOS can put things right, if it is aware that you have been treated unfairly. This service is free to use.

It is also able to help with complaints about other services in the UK which includes debt collection, payday loans, mortgages, insurance and other claims management companies. The FOS will tell you if the complaint is something it can help you with.

FOS can also inform the firm to compensate you for any losses caused. You can find out more about compensation here, Financial Ombudsman Service Compensation.

FSCS is able to help if you have a complaint against a firm or business that has gone out of business. If the business you have been dealing with is unable to pay back your money because it has failed then the FSCS can see if you are eligible to claim compensation. This is also a free service.

FSCS protects regulated financial products and services including banks and building societies. It can help with your accounts with mortgages, insurances, pensions and investments. However to claim compensation with the FSCS you need to be eligible under their rules. Also the amount of compensation that the FSCS can pay out depends on the type of financial product or service that your claim relates to.

Funding and Governance of the Financial Ombudsman Service

The FOS was set up by Parliament to resolve issues with complaints between businesses and customers in an impartial way. They are a statutory dispute resolution scheme set up under the Financial Service and Markets Act 2000.

Parliament saw that access to a free independent dispute resolution service was in fact essential for public confidence in financial services and that those businesses, not their customers should meet the costs of resolving issues and complaints. Therefore businesses may have to pay an individual case fee when the FOS handles a complaint against them. All businesses that are covered by the FOS are regulated by the FCA (the Financial Conduct Authority) and pay an annual fee to contribute to the costs. The levy is collected whether or not the FOS has had a complaint about them or not. The levy can range from £45 a year for a small financial service to over £1 million a year for a high-street bank.

Information about the Financial Conduct Authority – FCA

The difference between the FCA and FOS is that in short the FCA will decide on what should happen and FOS will make sure it does! The FCA publishes rules that set out how financial businesses should handle complaints. Please look at the FCA Handbook in the section called Dispute Resolution: complaints (DISP)

The FCA board members are “non-executive” which means they are not involved with individual complaints. Their role is to oversee the strategy of the FOS and to make sure they have the resources they need to work effectively and also independently.