It is also relevant to those who might wish to refer a complaint to the Financial Ombudsman Service.

1. (2)

   relevant new complaints about events before commencement but referred to the Financial Ombudsman Service after commencement under the Ombudsman Transitional Order; and

2. (3)

   relevant transitional complaints referred to the Financial Ombudsman Service after the relevant commencement date under the Mortgages and General Insurance Complaints Transitional Order.

References in this chapter to "firms" are to be construed, where relevant, as including:

1. (1)

   in accordance with the Ombudsman Transitional Order, unauthorised persons subject to the Compulsory Jurisdiction in relation to relevant complaints; and

2. (2)

   as a result of section 226 of the Act, unauthorised persons who were formerly firms in respect of complaints about acts or omissions which occurred at the time when they were authorised, provided that the Compulsory Jurisdiction rules were in force in relation to the activity in question.

The purpose of this chapter is to set out the rules which govern the scope of both the Compulsory Jurisdiction and the Voluntary Jurisdiction of the Financial Ombudsman Service. They specify who may refer a complaint to the Financial Ombudsman Service and the time limits for doing so. They also set out which activities are covered by the Compulsory Jurisdiction and the Voluntary Jurisdiction and the territorial scope of the Financial Ombudsman Service.

The following conditions will need to be satisfied before a complaint (other than a relevant new complaint or relevant transitional complaint) can be dealt with under the Financial Ombudsman Service:1

1. (1)

   the complainant must be an eligible complainant (see DISP 2.4);

2. (2)

   the firm or VJ participant about which the complaint is made must be one which is subject to either the Compulsory Jurisdiction or the Voluntary Jurisdiction, as appropriate;

3. (3)

   the activity to which the complaint relates must be subject to either the Compulsory Jurisdiction or the Voluntary Jurisdiction, as appropriate;

4. (4)

   in relation to the Compulsory Jurisdiction, the act or omission complained of must have occurred at a time when the rules in DISP 2 were in force, in relation to the activity being complained about;

5. (5)

   the firm or VJ participant must have failed to resolve the complaint to the satisfaction of the complainant within eight weeks of receiving it; and

6. (6)

   the firm or VJ participant about which the complaint is made must:

   1. (a)

      in the case of the Compulsory Jurisdiction, have been authorised under the Act at the time of the act or omission to which the complaint relates; or

   2. (b)

      in the case of the Voluntary Jurisdiction, have been a VJ participant at the time of the act or omission to which the complaint relates or have agreed to let the Financial Ombudsman Service consider such complaints, and must not have withdrawn from being a VJ participant at the time when the complaint is referred to the Financial Ombudsman Service.

1. (1)

   Article 3 of the Ombudsman Transitional Order provides that (subject to certain modifications) the Compulsory Jurisdiction applies to a relevant new complaint, provided that:

   1. (a)

      the act or omission is that of a person who was, immediately before commencement, subject to a former scheme;

   2. (b)

      the act or omission occurred in the carrying on by that person of an activity to which that former scheme applied; and

   3. (c)

      the complainant is eligible and wishes to have the complaint dealt with under the new scheme.

2. (2)

   For the purposes of (1)(c), the Ombudsman Transitional Order enables the Ombudsman, if he considers it appropriate, to treat the complainant as eligible if he would have been entitled to refer an equivalent complaint to the former scheme in question immediately before commencement.

3. (3)

   The Ombudsman Transitional Order enables relevant new complaints to be handled, as far as possible, under the Financial Ombudsman Service procedures, but provides for the rules of the former schemes to apply or be taken into account in certain circumstances.

4. (4)

   The Ombudsman Transitional Order makes separate provision for the treatment of relevant existing complaints, as described in DISP App 1

1. (1)

   1Article 2 of the Mortgage and General Insurance Complaints Transitional Order provides that (subject to certain modifications) the Compulsory Jurisdiction applies to a relevant transitional complaint, provided that:

   1. (a)

      the act or omission is that of a person ("R") who, at the time of that act or omission, was subject to a former scheme;

   2. (b)

      R was an authorised person on or after the relevant commencement date;

   3. (c)

      the act or omission occurred in the carrying on by R of an activity to which that former scheme applied; and

   4. (d)

      the complainant is eligible and wishes to have the complaint dealt with under the new scheme.

2. (2)

   1For the purposes of (1)(d), the Mortgage and General Insurance Complaints Transitional Order enables the Ombudsman, if he considers it appropriate, to treat the complainant as eligible if he would have been entitled to refer an equivalent complaint to the former scheme in question immediately before the relevant commencement date.

3. (3)

   1The Mortgage and General Insurance Transitional Order enables relevant transitional complaints to be handled, so far as possible, under the Financial Ombudsman Service procedures, but provides for the rules of the former schemes to apply or be taken into account in certain circumstances.

Under DISP 3.3.1 R, the Ombudsman may dismiss a complaint without considering its merits if he is satisfied that the complainant has not suffered, or is unlikely to suffer, financial loss, material distress or material inconvenience.

1If the complaint relates to the sale of an endowment policy for the purpose of achieving capital repayment of a mortgage, the receipt by the complainant of a letter which states that there is a risk (rather than a high risk) that the policy would not, at maturity, produce a sum large enough to repay the target amount is not, itself, sufficient to cause the three year time period in DISP 2.3.1 R (1)(c) to start to run.

In relation to DISP 2.3.1 R (1)(b) and (c), article 4(2) of the Ombudsman Transitional Order requires an Ombudsman to extend the time limit in respect of a relevant new complaint referred to the Financial Ombudsman Service not later than twelve months after commencement, so the time limit applying to the complaint is the same as that which would have applied under the former scheme in question as it had effect immediately before commencement.

For the purposes of DISP 2.3.1 R (2), an example of an exceptional circumstance might be where the complainant has been or is incapacitated or where the firm or VJ participant has failed, in its final response, to inform the complainant that he may refer his complaint to the Financial Ombudsman Service or that he must do so within six months.

Eligible complainants are those falling within one of the classes of person specified in DISP 2.4.3 R; and

1. (1)

   having a customer or potential customer relationship with a firm or VJ participant (as specified in DISP 2.4.7 R and DISP 2.4.8 R); or

2. (2)

   having an indirect relationship with a firm or VJ participant (as specified in DISP 2.4.10 R);

or, in relation to relevant complaints, those specified in the Ombudsman Transitional Order or the Mortgages and General Insurance Transitional Order (see DISP 2.4.14 G, DISP 2.4.15 G, and DISP App 1.3.1 G).2

For the purposes of DISP 2, a business includes a sole trader, a company, an unincorporated body and a partnership carrying on any trade or profession.

If a firm or VJ participant is in any doubt about the eligibility of a business, charity or trust, it should treat the complainant as if it were eligible. If the complaint is referred to the Financial Ombudsman Service, the Ombudsman will determine eligibility by reference to appropriate evidence, such as audited accounts or VAT returns.

For the purposes of DISP 2.4.3 R(1)(b), a subsidiary of a corporate group (as defined in section 262(1) of the Companies Act 1985) will be eligible only where the corporate group as a whole meets the turnover test.

DISP 2.4.8 R is intended to enable a potential customer to use the Financial Ombudsman Service where the complaint involves an allegation that he has suffered or may suffer financial loss, material distress or material inconvenience as a result of a firm's or VJ participant's wrongful act or omission (for example, where, as a result of maladministration or illegal discrimination, a service has not been provided). A complaint about the legitimate exercise of a firm's or VJ participant's commercial judgment may be dismissed by an Ombudsman without consideration of its merits under DISP 3.3.1 R(11).

DISP 2.4.12 R (2) and(3) include, for example, employees covered by a group permanent health policy taken out by an employer, which provides in the insurance contract that the policy was taken out for the benefit of the employee. They do not include, for example, complaints about the actions of the insurer of the other driver in a car accident,1

In respect of a relevant new complaint or a relevant transitional complaint, where the complainant is not eligible in accordance with DISP 2.4, article 3(3) of the Ombudsman Transitional Order and article 2(3) of the Mortgages and General Insurance Complaints Transitional Order provides that the Ombudsman may, nonetheless, if he considers it appropriate, treat the complainant as an eligible complainant if he or she would have been entitled to refer an equivalent complaint to the former scheme in question immediately before commencement, provided that the complainant wishes to have the complaint dealt with under the new scheme.2

Article 3(4) of the Ombudsman Transitional Order provides that, in the case of a relevant new complaint, where the former scheme in question is the Insurance Ombudsman Scheme, a complainant is not to be treated as an eligible complainant unless:

1. (1)

   he is an individual; and

2. (2)

   the complaint does not concern aspects of a policy relating to a business or trade carried on by him.

2Article 2(4) of the Mortgages and General Insurance Transitional Order provides that, in the case of a relevant transitional complaint, where the former scheme in question is the GISC facility, a complainant is not to be treated as an eligible complainant unless:

1. (1)

   he is an individual; and

2. (2)

   he is acting otherwise than solely for the purposes of his business.

2Article 2(5) of the Mortgages and General Insurance Transitional Order provides that, in the case of a relevant transitional complaint, where the former scheme in question is the MCAS scheme, a complainant is not to be treated as an eligible complainant if:

1. (1)

   the complaint does not relate to a breach of the Mortgage Code published by the Council of Mortgage Lenders;

2. (2)

   the complaint concerns physical injury, illness, nervous shock or their consequences; or

3. (3)

   the complainant is claiming a sum of money that exceeds £100,000.

Firms may, however, be exempt from the requirements of DISP 1 (Complaint handling procedures for firms) and FEES 5124 (Financial Ombudsman Service funding), if they qualify under DISP 1.1.7 RR (Exemption).

Members of the Society of Lloyd's are treated as firms for the purposes of the Compulsory Jurisdiction (including the rules in DISP 1 relating to firms' complaints procedures) and are subject to DISP 1 as a result of the insurance market direction given in LLD 6.2.1 D, under section 316 of the Act (Direction by Authority). However, as set out in DISP 1.7, members will individually comply with DISP 1 if and only if all complaints by policyholders against members are dealt with under the internal procedures established by the Society of Lloyd's for handling those complaints, provided that these procedures themselves comply with DISP 1. Accordingly, certain of the obligations under DISP 1, for example, the obligation to report on complaints received, must be complied with by the Society on behalf of members.

2Under article 2 of the Mortgage and General Insurance Complaints Transitional Order, the Ombudsman can also consider a relevant transitional complaint under the Compulsory Jurisdiction where it relates to an act or omission of a firm which was, immediately before the relevant commencement date, subject to a former scheme, provided that:

1. (1)

   the act or omission occurred in the carrying on by that firm of an activity to which that former scheme applied; and

2. (2)

   the complainant is eligible and wishes to have the complaint dealt with under the new scheme.

Complaints about acts or omissions by a firm include complaints about acts or omissions in respect of activities for which the firm is responsible (including business of any appointed representative for which the firm has accepted responsibility).3

For the purposes of DISP 2.6.1 R (5), ancillary banking services include, for example, the provision and operation of cash machines and safe deposit boxes and the provision of account aggregation services (that is, services where details from several accounts which may be held by different financial service providers can be accessed by a single password).1

A complaint about a non-mainstream regulated activity conducted by an authorised professional firm will be handled by the relevant professional body.

A complaint may be covered by the Voluntary Jurisdiction under one or more of the subparagraphs of DISP 2.6.9 R

DISP 2.6.9 R (6A) includes:

1. (1)

   making arrangements for a borrower or potential borrower to enter into, or vary the terms of, a loan secured by a charge over land;

2. (2)

   making arrangements with a view to a borrower or potential borrower who participates in the arrangements entering into a loan secured over land; and

3. (3)

   advising a borrower or potential borrower on the merits of entering into, or varying the terms of, a loan secured by a charge over land.

DISP 2.6.9 R (6B) includes:

1. (1)

   introducing, proposing or carrying out other work preparatory to the conclusion of contracts of general insurance business or long-term insurance business or reinsurance;

2. (2)

   concluding such contracts;

3. (3)

   assisting in the administration and performance of such contracts, in particular in the event of a claim;

4. (4)

   dealing as an agent, or arranging deals, in such contracts (or rights in them);

5. (5)

   managing, safeguarding or administering assets consisting of, or including, such contracts (or rights in them); and

6. (6)

   advising on the merits of buying, selling, subscribing for or underwriting such contracts (or rights in them).

But customers of reinsurance intermediaries are unlikely to be eligible complainants.

DISP 2.6.9 R (7) enables complaints about VJ participants which, immediately before the commencement day, were members of one of the former schemes replaced by the Financial Ombudsman Service to be dealt with under the Voluntary Jurisdiction. This is in respect of the financial services activities for which the VJ participant was previously covered but excludes complaints which fall into the Compulsory Jurisdiction as relevant complaints. So the complaints which are covered by DISP 2.6.9 R (7) are only those which arise out of acts or omissions occurring after the commencement day.

DISP 2.6.9 R (6) includes the activities referred to in DISP 2.6.6 G.

DISP 2.6.9 R (8) enables a firm that is subject to the compulsory jurisdiction for regulated activities to become a VJ participant in order to cover complaints about earlier events relating to those activities before they became regulated activities.

The provisions of DISP 2.6.12 R are made under the power in sections 227(13) and 227(14) of the Act. Those sections allow for a complaint relating to an act or omission occurring either before commencement or before the VJ participant joined the Voluntary Jurisdiction (or both) to be dealt with under the Financial Ombudsman Service. Under section 227(13), the act or omission must be one which could have been dealt with under a former scheme. Under section 227(14), the VJ participant must agree; but that agreement is provided by DISP 2.6.12 R (2)and DISP 4.2.5 R. Where complaints in this category are not already covered by the Compulsory Jurisdiction as relevant complaints, they can, therefore, be included in the Voluntary Jurisdiction under DISP 2.6.12 R.

The Compulsory Jurisdiction:

1. (1)

   covers firms (including appointed representatives) operating from an establishment in the United Kingdom, including incoming EEA firms and incoming Treaty firms which qualify for authorisation under Schedule 3 (EEA Passport Rights) or Schedule 4 (Treaty Rights) to the Act; but

2. (2)

   does not cover complaints which concern business conducted by branches of firms outside the United Kingdom or by EEA firms operating in the United Kingdom on a services basis from outside the United Kingdom.

The Voluntary Jurisdiction:

1. (1)

   covers VJ participants operating from an establishment in the United Kingdom;

2. (2)

   also covers complaints that concern business conducted by VJ participants operating elsewhere in the EEA, but only in relation to the activities specified in DISP 2.6.9 R (1) to DISP 2.6.9 R (6) subject to the conditions in DISP 2.7.2 R (1) to DISP 2.7.2 R (3).