The Association of Consumer Support Organisations (ACSO) has raised significant concerns in response to proposed changes by the Financial Ombudsman Service (FOS).
Outlined in the 2024/25 plans and budget consultation paper, FOS is contemplating imposing fees ranging from £50 to £650 on professional firms, including law firms and claims management companies, for each complaint made with their assistance.
In a recent statement, the association labelled the potential alterations as a looming “stealth tax” for consumers seeking professional assistance in filing complaints.
ACSO executive director Matthew Maxwell Scott underscored the proposed changes' potential impact on the volume of complaints.
“If the FOS wanted to reduce its workload, it's going the right way about it, but it is consumers that will suffer,” he said. “FOS outlines a £100 reduction in fees paid by financial services firms to fund the processing of a complaint. So, it seems that the £100 saving for banks, insurers, and other big companies will instead be paid by people making a complaint against them.”
Addressing the issue of unjustified complaints, Maxwell Scott acknowledged the challenges faced by professional claimant representatives in filtering them out. He advocated for an emphasis on enhancing how companies handle complaints instead of imposing charges on consumers.
“We understand that FOS wants to reduce the number of unmeritorious claims, which we support, but this is no way to proceed,” he said. “Unjustified complaints impact all consumers through increased costs of products and services, but the way many companies deal with complaints means it is more challenging than it should be for professional claimant representatives to filter them out.”
While acknowledging FOS's intention to streamline the complaints process, Maxwell Scott argued that charging fees might discourage individuals from pursuing justifiable cases, particularly amid an already challenging cost-of-living crisis.
With the consultation period concluding on January 30, Maxwell Scott emphasised the need for a system that facilitates consumer redress without imposing additional financial burdens.
“The last thing we want is for consumer-protection agencies to hand the ball to the financial services providers companies it is supposed to be policing,” he said.
