Financial Ombudsman Service  

Fos considers govt proposal to halve complaint waiting time

Fos considers govt proposal to halve complaint waiting time

The Financial Ombudsman Service (Fos) is considering the government’s proposal to halve complaint waiting times for consumers from eight to four weeks.

In a consultation document entitled ‘Reforming Competition and Consumer Policy’, published this week (July 20), the government said “there is a good case” for halving the upper threshold of eight weeks in markets where alternative dispute resolution (ADR) is mandatory.

This means businesses will have four weeks instead of eight to deal with a client's complaint before it will be referred to the Fos.

The government believes this will incentivise businesses to settle problems promptly and allow consumers to take complaints to the Fos more quickly.

But it could also see more cases land at the Fos.

The Fos told FTAdviser: “We’ll be considering the proposals and will work with government, stakeholders and regulatory bodies on any rule changes that may affect our service going forward.”

Evidence from the government’s earlier Consumer Green Paper found “this lengthy period was no longer justified in an era of email and social media”.

The government added: “Respondents felt that it did not reflect consumers’ changing expectations of engaging with business and led to consumers abandoning complaints.”

The department for Business, Energy, and Industrial Strategy (BEIS) recognised that in regulated markets, “the majority of disputes are resolved within four weeks, but most regulators have typically set an upper limit of eight weeks for businesses to resolve complaints before consumers are entitled to take a dispute to ADR.”

BEIS does recognise there may need to be exceptions for particularly complicated cases, however.

“Government would welcome views on whether regulators should aim to set a significantly lower threshold for consumers to exercise their right to access ADR and if so whether exceptions could or should be made to allow more time to resolve complex cases.”

The All-Party Parliamentary Group (APPG) had already warned back in 2019 that the upper limit of eight weeks should be shortened.

The government has now concluded: “Maintaining an upper limit of eight weeks has the potential to harm both consumers and businesses if active steps are not being taken to resolve the complaint.

“Protracted disputes can cause consumers stress and financial hardship and may harm businesses too by eroding trust and reducing satisfaction with business complaint handling, affecting customer retention.”

Whilst the Fos did not share further comment on the proposals than already stated, the government said “many regulators already support a significant reduction in this threshold and see the business and consumer benefits of doing so”. 

Other industries are already starting to reduce their complaint wait times.

The energy sector has reduced the time to access ADR voluntarily, and the Office of Rail and Road (ORR) has set an upper limit of 40 days in the rail sector but intends to formally consult this year on reducing it.

ruby.hinchliffe@ft.com