How we make decisions

How we reach decisions

We have a duty to make decisions 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 won’t need to make your case in person. And there’s no “cross-examination”, where both sides ask each other questions.

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, and Chapter 4, Part 3, of the Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018. 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.

Initial assessments

If we get a complaint about a complaints management company (CMC), a case handler will look at this and then share their initial thoughts 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.

Final binding decisions

If a case is formally referred to an ombudsman, they’ll review all the facts and evidence. When they reach the end of a case, 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 consumer, you don’t have to accept the final decision, and you can withdraw from our process at any stage. You can also take the dispute to court instead, if you prefer.

The rules are different for CMCs. If a consumer accepts our final decision, then the decision is legally binding on the CMC. 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 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.

Our knowledge and experience

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.

The way we work

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. 

Read more about what to expect when you bring a complaint to us.

Time limits for complaining

There are time limits affecting whether we can or can’t help with a complaint.

A consumer needs to contact us within six months of the date of a CMCs final response to their complaint. After six months, we won’t be able to help unless:

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

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

You can read more detailed information about time limits.

Compensation

If a consumer has lost out financially, we’ll look to put them back in the position they would be in if the CMC being complained about hadn’t made a mistake.

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

There’s a limit to how much we can tell a CMC to pay. If we think that compensation should be higher than our award limit we can recommend that the CMC 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.

You can read more about compensation.