The
Financial Ombudsman Service (
FOS) is an independent dispute resolution service in the UK that provides consumers with free and impartial help to resolve financial complaints. If you have a dispute with your car finance provider, the FOS can act as an intermediary to reach a fair outcome.
What is the Financial Ombudsman Service?
The Financial Ombudsman Service (FOS) was established in 2015 by combining two earlier ombudsmen: the Banking Ombudsman and the Insurance Ombudsman. It operates independently of financial institutions and government bodies, providing a final and binding resolution for complaints that cannot be resolved directly between consumers and financial providers.
The FOS differs from the Financial Conduct Authority (FCA) in its role and function. While the FCA regulates financial firms to ensure they behave honestly, act with integrity, and provide fair treatment to customers, the FOS resolves individual disputes between consumers and regulated firms. The FOS offers a free service for consumers who feel that their lender has not treated them fairly.
How does the FOS handle motor finance complaints?
The process of handling car finance complaints at the Financial Ombudsman Service (FOS) involves several steps to ensure fair resolution:
1.
Initial Complaint: Consumers should first raise their issue with their car finance provider, giving them 8 weeks to respond.
2.
Escalation to FOS: If the lender's response is unsatisfactory or if no reply is received within 8 weeks, consumers can escalate the complaint to the FOS.
3.
Formal Complaint Submission: Consumers submit a formal complaint detailing their issue and providing any relevant documentation.
4.
Investigation: The FOS investigates the case by gathering evidence from both parties involved.
5.
Decision: After thorough investigation, the FOS makes a decision that is binding on the lender if they comply with the ombudsman's rules.
What does the FCA scheme cover
The Financial Ombudsman Service can award up to £430,000 for individual complaints involving car finance issues. The compensation awarded may include financial redress such as repayment of overcharged amounts and interest on those sums.
When can you escalate to the FOS?
You can escalate your complaint to the FOS if one of the following conditions is met:
- No Response: You have not received a response from your car finance provider within 8 weeks after raising the issue.
- Unsatisfactory Response: The response provided by your lender does not address your concerns adequately.
What are the common reasons for escalation to the FOS?
Common reasons for escalating car finance complaints to the FOS include:
- Misleading information during contract signing
- Unfair interest rates or hidden fees
- Discretionary commission arrangements (DCAs) that were not fully disclosed
How to submit a complaint to the FOS
Submitting a complaint to the Financial Ombudsman Service is straightforward and can be done through various channels:
Online Submission
1. Visit the
FOS website and deal with to the "Submit a complaint" section.
2. Provide your personal details, including name, address, and contact information.
3. Describe your issue in detail, outlining what happened, when it occurred, and why you believe you were treated unfairly.
4. Upload any relevant documents such as contract agreements, correspondence with your lender, or evidence of miscommunication.
By Phone
1. Call the FOS helpline at 0800 023 4567 to discuss your complaint.
2. Provide necessary details over the phone and follow up by sending any required documentation via post or email.
By Post
1. Download a complaint form from the FOS website or request one by calling their helpline.
2. Complete the form, providing all relevant information and attaching supporting documents.
3. Mail the completed form along with your documentation to:
Financial Ombudsman Service
Exchange Tower
London E14 9SR
To submit a complaint effectively, you will need:
- Personal identification (name, address, contact details)
- Details of your car finance agreement
- Correspondence with the lender regarding the issue
- Any evidence supporting your claim
What can the FOS award?
The Financial Ombudsman Service has the authority to award compensation and redress up to £430,000 for individual complaints. This includes:
- Monetary Compensation: Repayment of overcharged amounts or fees.
- Interest on Overcharges: Compensation for interest accrued on sums that should not have been charged.
- Non-Monetary Relief: In some cases, the FOS can order lenders to take specific actions beyond financial compensation.
How much could I be compensated?
The amount the FCA-estimated scheme average is £829 per eligible agreement. For example, if your car finance provider has overcharged you due to undisclosed discretionary commission arrangements (DCAs), the FOS may award a refund plus interest for the period during which you were overcharged.
How long does the FOS process take?
The Financial Ombudsman Service aims to resolve complaints within 6 months from receipt. However, given the surge in car finance complaints due to DCA issues, there can be delays.
What is the typical timeline for a resolution?
- Initial Complaint: Up to 8 weeks with your lender.
- Escalation to FOS: Immediate after receiving an unsatisfactory response or no response at all.
- Investigation Phase: Typically takes several months as the FOS reviews documents and gathers evidence from both parties.
How can I expedite my complaint?
While there is no guaranteed way to expedite your complaint, you can ensure a faster process by:
1. Providing complete and accurate information initially.
2. Responding promptly to any requests for additional documentation or clarification.
3. Ensuring that all relevant details are included in your initial submission.
The FOS and the FCA motor finance investigation
The Financial Ombudsman Service has been handling a significant volume of complaints related to car finance, particularly those involving discretionary commission arrangements (DCAs). These complaints have surged due to the FCA's ongoing investigation into unfair practices within the industry.
How is the FOS managing the increased load?
To manage the surge in DCA-related complaints, the FOS has implemented additional staff and streamlined processes where possible. However, there may still be delays due to the high volume of cases.
Are there any special procedures for DCAs?
While there are no special procedures exclusively for DCA complaints, the FOS prioritises all car finance claims to ensure fair treatment and timely resolution. If you believe your lender has not disclosed or adequately explained a discretionary
commission arrangement, you can escalate your complaint directly to the FOS.
The Financial Ombudsman Service process is free for consumers. There is no need to engage with third-party claims management companies that may charge fees for handling your complaint. Instead, you should
complain directly to your lender first and only escalate to the FOS if necessary.
How can I handle my complaint independently?
1.
Complain Directly: Raise your issue with your car finance provider within 6 months of discovering it or when they should have told you.
2.
Keep Records: Document all correspondence, including emails, letters, and phone calls.
3.
Escalate to FOS: If the lender does not provide a satisfactory response or if you do not hear back within 8 weeks, escalate your complaint to the FOS.
You can complain directly to your lender for free. You do not need a claims management company.
Sources and references
- Financial Ombudsman Service (FOS) website:
- Financial Conduct Authority (FCA): "Motor Finance: Unfair Discretionary Commission Arrangements," 2024.
- Office for National Statistics (ONS): Census data on car finance usage, 2021.
By understanding the process and your rights as a consumer, you can deal with the FOS system effectively to seek fair resolution for any car finance issues you may encounter.
Key FCA Figures
The FCA confirmed on 30 March 2026: 12.1 million eligible agreements, £829 average compensation per agreement, £7.5 billion total redress at 75% consumer uptake, and £9.1 billion total cost to firms. The scheme covers agreements from 6 April 2007 to 1 November 2024. Two deadlines apply: 30 June 2026 for post-2014 agreements and 31 August 2026 for pre-2014. Final complaint deadline: 31 August 2027.
You can complain to your lender directly for free. You do not need a claims management company.
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MLJ.org.uk (mlj.org.uk) is a free, independent information service. We are not a claims management company, solicitor, law firm, or financial adviser. We do not handle complaints, process claims, charge fees, or accept any percentage of compensation. This information does not constitute legal or financial advice. You can complain to your lender directly for free. You do not need a claims management company. If your lender rejects your complaint, you can escalate to the Financial Ombudsman Service at no cost. For personalised legal or financial advice, consult a qualified professional.