Question to the HM Treasury:

To ask His Majesty's Government whether they intend to direct the Financial Conduct Authority to introduce a financial threshold above which the Financial Ombudsman Service is required to investigate a reasonable complaint without recourse to non-specific or procedural grounds for dismissal, particularly in cases where alleged fraud exceeds £1 million.

The Government cannot direct the Financial Conduct Authority (FCA) regarding the content of its rules.

The Financial Ombudsman Service (FOS) plays an important role in providing quick and informal resolution of complaints between financial services providers and their customers, as an alternative to resolution through the courts. However, the Government recognises that there are some cases where it is appropriate for the FOS to dismiss complaints without consideration of the merits – for example, where it would be more suitable for the complaint to be dealt with by a court or another alternative dispute resolution body.

The FOS and the FCA recently consulted on changes to the rules setting out the grounds for dismissal of complaints, and are considering the responses received.

In relation to complex fraud cases, the consultation notes that these will often be the subject of a criminal investigation, where the relevant authorities have greater legal powers to carry out certain investigations and whose findings may have a direct bearing on any determination made by the FOS. If the FOS were to make a decision before such proceedings conclude, this could result in outcomes that are not fair and reasonable, or could potentially prejudice future legal proceedings.