Financial Ombudsman Service (FOS) faces criticism from the Association of Consumer Support Organisations (ACSO)

The Financial Ombudsman Service (FOS) faces criticism from the Association of Consumer Support Organisations (ACSO) over proposed fees for consumers seeking professional support in complaints against financial services firms. The 2024/25 plans and budget consultation paper suggest charging professional firms, such as law firms or claims management companies, between £50 and £650 based on the nature of the complaint.

ACSO Executive Director Matthew Maxwell Scott argues that these charges are unfair and likely to deter consumers from making complaints, ultimately benefiting financial services firms. He notes a paradox where the FOS plans a reduction in fees paid by financial services firms while proposing charges for consumers using professional services.

Maxwell Scott highlights the importance of professional firms in assisting consumers with legitimate complaints and expresses concern that passing on increased costs to customers could make the complaints process unaffordable. He emphasizes that FOS should focus on addressing unjustified complaints rather than imposing charges on consumers.

ACSO cites instances where consumers, supported by professional representatives, are forced to resort to FOS complaints due to non-disclosure of commission models by lenders. Maxwell Scott argues that rather than introducing fees, FOS should address issues like non-disclosure.

He urges consumer bodies such as Which?, Money Saving Expert, and Fairer Finance to voice their concerns about the proposed fees, considering the potential impact on consumers during the ongoing cost-of-living crisis. Maxwell Scott describes the proposed charges as a regressive form of stealth tax on consumers and emphasizes the need for consumer-protection agencies to prioritize consumer redress over financial services providers.

The consultation period for the FOS proposals closed on January 30, and ACSO hopes that collective efforts from various consumer advocacy groups will prevent what it views as a backward step in consumer protection. The organization stresses that, especially in the aftermath of the Post Office scandal, consumers should have the option of support to address grievances against powerful financial entities.