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DISP 2.1 Purpose, interpretation and application

Purpose

DISP 2.1.1 G RP

The purpose of this chapter is to set out rules and guidance on the scope of the Compulsory Jurisdiction, the Consumer Credit Jurisdiction and the Voluntary Jurisdiction, which are the Financial Ombudsman Service's threejurisdictions:

  1. (1)

    the Compulsory Jurisdiction is not restricted to regulated activities and covers:

    1. (a)

      certain complaints against firms (and businesses which were firms at the time of the events complained about); and

    2. (b)

      relevant complaints against former members of former schemes under the Ombudsman Transitional Order and the Mortgage and General Insurance Complaints Transitional Order;

  2. (2)

    the Consumer Credit Jurisdiction covers certain complaints against licensees (and businesses which were licensees at the time of the events complained about); and

  3. (3)

    the Voluntary Jurisdiction covers certain complaints against VJ participants, including in relation to events before they joined the Voluntary Jurisdiction.418

DISP 2.1.3 G RP

The Ombudsman Transitional Order requires the Financial Ombudsman Service to complete the handling of relevant existing complaints, in a significant number of respects, in accordance with the requirements of the relevant former scheme rather than in accordance with the requirements of this chapter.418

Interpretation

DISP 2.1.4 G RP

In this chapter, carrying on an activity includes:418

4 18
  1. (1)

    418 offering, providing or failing to provide a service in relation to an activity;418

  2. (2)

    administering or failing to administer a service in relation to an activity; and418

    3418
  3. (3)

    the manner in which a respondent has administered its business, provided that the business is an activity subject to the Financial Ombudsman Service's jurisdiction.418

    418

Purpose

DISP 2.1.5 G RP

In this chapter, ancillary banking services include, for example, the provision and operation of cash machines, foreign currency exchange, safe deposit boxes and account aggregation services (services where details of accounts held with different financial service providers can be accessed by a single password).418

4 18

Application

DISP 2.1.6 R RP

4 18This chapter applies to the Ombudsman and to respondents.

DISP 2.1.7 D RP

4 18 Part XVI of the Act (The Ombudsman Scheme), particularly section 226 (Compulsory jurisdiction),5 applies to members of theSociety of Lloyd's5 in respect of the regulated activities of effecting or carrying out contracts of insurance written at Lloyd's.

5 5

DISP 2.2 Which complaints can be dealt with under the Financial Ombudsman Service?

DISP 2.2.1 G RP

The scope of the Financial Ombudsman Service's threejurisdictions depends on:26

2 6
  1. (1)

    the type of activity to which the complaint relates (see DISP 2.3, DISP 2.4 and DISP 2.5);

  2. (2)

    the place where the activity to which the complaint relates was carried on (see DISP 2.6);

  3. (3)

    whether the complainant is eligible (see DISP 2.7); and

  4. (4)

    whether the complaint was referred to the Financial Ombudsman Service in time (see DISP 2.8).

DISP 2.3 To which activities does the Compulsory Jurisdiction apply?

DISP 2.3.1 R RP

The Ombudsman can consider a complaint under the Compulsory Jurisdiction if it relates to an act or omission by a firm in carrying on one or more of the following activities:

  1. (1)

    regulated activities ;

  2. (2)

    consumer credit activities;

  3. (3)

    lending money secured by a charge on land;

  4. (4)

    lending money (excluding restricted credit where that is not a consumer credit activity );

  5. (5)

    paying money by a plastic card (excluding a store card where that is not a consumer credit activity );

  6. (6)

    providing ancillary banking services;

or any ancillary activities, including advice, carried on by the firm in connection with them.630

DISP 2.3.2 G RP

The Ombudsman can also consider under the Compulsory Jurisdiction:630

6 30
  1. (1)

    as a result of the Ombudsman Transitional Order, a relevant existing complaint or a relevant new complaint that relates to an act or omission by a firm or an unauthorised person which was subject to a former scheme immediately before commencement; or

  2. (2)

    as a result of the Mortgages and General Insurance Complaints Transitional Order, a relevant transitional complaint that relates to an act or omission by a firm (or an unauthorised person that ceased to be a firm after the relevant commencement date) which was subject to a former scheme at the time of the act or omission;

provided that:

  1. (3)

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

  2. (4)

    the complainant is eligible and wishes to have the complaint dealt with by the Ombudsman.

DISP 2.3.3 G RP

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).630

DISP 2.3.4 R RP

A complaint about an authorisedprofessional firm cannot be handled under the Compulsory Jurisdiction of the Financial Ombudsman Service if it relates solely to a non-mainstream regulated activity and can be handled by a designated professional body.630

DISP 2.3.5 G RP

[deleted]

6 30

DISP 2.5 To which activities does the Voluntary Jurisdiction apply?

DISP 2.5.1 R RP

The Ombudsman can consider a complaint under the Voluntary Jurisdiction if:427

  1. (1)

    it is not covered by the Compulsory Jurisdiction or the Consumer Credit Jurisdiction; and

    427
  2. (2)

    it relates to an act or omission by a VJ participant in carrying on one or more of the following activities:

    1. (a)

      an activity carried on after 28 April 1988 which:

      1. (i)

        was not a regulated activity at the time of the act or omission, but

      2. (ii)

        was a regulated activity when the VJ participant joined the Voluntary Jurisdiction (or became an authorised person, if later);

    2. (b)

      a financial services activity carried on after commencement by a VJ participant which was covered in respect of that activity by a former scheme immediately before the commencement day;

    3. (c)

      activities which (at 1 July 2007) were regulated activities or would be regulated activities if they were carried on from an establishment in the United Kingdom (these activities are listed in DISP 2 Annex 1G);

    4. (d)

      activities which would be consumer credit activities if they were carried on from an establishment in the United Kingdom

    5. (e)

      lending money secured by a charge on land;

    6. (f)

      lending money (excluding restricted credit where that is not a consumer credit activity );

    7. (g)

      paying money by a plastic card (excluding a store card where that is not a consumer credit activity );

    8. (h)

      providing ancillary banking services;

    9. (i)

      acting as an intermediary for a loan secured by a charge over land;

    10. (j)

      acting as an intermediary for general insurance business or long-term insurance business;

    11. (k)

      National Savings and Investments' business;

or any ancillary activities, including advice, carried on by the VJ participant in connection with them.

4 27
DISP 2.5.2 G RP

The scope of the Voluntary Jurisdiction is wider than that of the Compulsory Jurisdiction, and so some activities are referred to in both jurisdictions.

1 24 1 24 4 27
DISP 2.5.3 G RP

DISP 2.5.1R (2)(a) is for those that are subject to the Compulsory Jurisdiction for regulated activities but are not covered by the Ombudsman Transitional Order or the Mortgage and General Insurance Complaints Transitional Order. It enables the Financial OmbudsmanScheme to cover complaints about earlier events relating to those activities before they became regulated activities.427

2 4 27
DISP 2.5.4 G RP

DISP 2.5.1R (2)(b) is for those that were members of one of the former schemes replaced by the Financial Ombudsman Service immediately before commencement. It enables the Financial Ombudsman Service5 to cover complaints that arise out of acts or omissions occurring after commencement for any activities which are not covered by the Compulsory Jurisdiction but that would have been covered by the relevant former scheme.427

5
DISP 2.5.5 R RP

4 27The Voluntary Jurisdiction covers an act or omission that occurred before the VJ participant was participating in the Voluntary Jurisdiction, and whether the act or omission occurred before or after commencement, either:

  1. (1)

    if the complaint could have been dealt with under a former scheme; or

  2. (2)

    under the agreement by the VJ participant in the Standard Terms.

DISP 2.6 What is the territorial scope of the relevant jurisdiction?

Compulsory Jurisdiction

DISP 2.6.1 R RP

The Compulsory Jurisdiction covers complaints about the activities of a firm (including its appointed representatives) carried on from an establishment in the United Kingdom.519

  1. (1)

    [deleted]

  2. (2)

    [deleted]

  3. (3)

    [deleted]

  4. (4)

    [deleted]

  5. (5)

    [deleted]

  6. (6)

    [deleted]

5 19
DISP 2.6.2 G RP

This:519

  1. (1)

    includes incoming EEA firms and incoming Treaty firms; but

  2. (2)

    excludes complaints about business conducted in the United Kingdom on a services basis from an establishment outside the United Kingdom

    .

Consumer Credit Jurisdiction

DISP 2.6.3 R

The Consumer Credit Jurisdiction covers only complaints about the activities of a licensee carried on from an establishment in the United Kingdom.519

Voluntary Jurisdiction

DISP 2.6.4 R RP

The Voluntary Jurisdiction covers only complaints about the activities of a VJ participant carried on from an establishment:519

  1. (1)

    in the United Kingdom; or

  2. (2)

    elsewhere in the EEA if the following conditions are met:

    1. (a)

      the activity is directed wholly or partly at the United Kingdom (or part of it);

    2. (b)

      contracts governing the activity are (or, in the case of a potential customer, would have been) made under the law of England and Wales, Scotland or Northern Ireland; and

    3. (c)

      the VJ participant has notified appropriate regulators in its Home State of its intention to participate in the Voluntary Jurisdiction.

Location of the complainant

DISP 2.6.5 G RP

A complaint can be dealt with under the Financial Ombudsman Service whether or not the complainant lives or is based in the United Kingdom.519

5 19
5 19

DISP 2.7 Is the complainant eligible?

DISP 2.7.1 R RP

A complaint may only be dealt with under the Financial Ombudsman Service if it is brought by or on behalf of an eligible complainant.127

1 27
DISP 2.7.2 R RP

A complaint may be brought on behalf of an eligible complainant (or a deceased person who would have been an eligible complainant) by a person authorised by the eligible complainant or authorised by law. It is immaterial whether the person authorised to act on behalf of an eligible complainant is himself an eligible complainant.127

Eligible complainants

DISP 2.7.3 R RP

An eligible complainant must be a person that is:127

  1. (1)

    a private individual;

  2. (2)

    a business, which has a group annual turnover of less than ?1 million at the time the complainant refers the complaint to the respondent;

  3. (3)

    a charity which has an annual income of less than £1 million at the time the complainant refers the complaint to the respondent; or

  4. (4)

    a trustee of a trust which has a net asset value of less than £1 million at the time the complainant refers the complaint to the respondent.

DISP 2.7.4 G RP
1 27

A business includes a sole trader, a company, an unincorporated body and a partnership carrying on any trade or profession. A subsidiary of a corporate group will be eligible only where the corporate group as a whole meets the turnover test.127

DISP 2.7.5 G RP

If a respondent is in 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.127

DISP 2.7.6 R RP

To be an eligible complainant a person must also have a complaint which arises from matters relevant to one or more of the following relationships with the respondent:127

  1. (1)

    the complainant is (or was) a customer of the respondent;

  2. (2)

    the complainant is (or was) a potential customer of the respondent;

  3. (3)

    the complainant is the holder, or the beneficial owner, of units in a collective investment scheme and the respondent is the operator or depositary of the scheme;

  4. (4)

    the complainant is a beneficiary of, or has a beneficial interest in, a personal pension scheme or stakeholder pension scheme;

  5. (5)

    the complainant is a person for whose benefit a contract of insurance was taken out or was intended to be taken out with or through the respondent;

  6. (6)

    the complainant is a person on whom the legal right to benefit from a claim against the respondent under a contract of insurance has been devolved by contract, assignment, subrogation or legislation (save the European Community (Rights against Insurers) Regulations 2002);

  7. (7)

    the complainant relied in the course of his business on a cheque guarantee card issued by the respondent;

  8. (8)

    the complainant is the true owner or the person entitled to immediate possession of a cheque or other bill of exchange, or of the funds it represents, collected by the respondent for someone else's account;

  9. (9)

    the complainant is the recipient of a banker's reference given by the respondent;

  10. (10)

    the complainant gave the respondent a guarantee or security for:

    1. (a)

      a mortgage;

    2. (b)

      a loan;

    3. (c)

      an actual or prospective regulated consumer credit agreement;

    4. (d)

      an actual or prospective regulated consumer hire agreement; or

    5. (e)

      any linked transaction as defined in the Consumer Credit Act 1974 (as amended);

  11. (11)

    the complainant is a person about whom information relevant to his financial standing is or was held by the respondent in operating a credit reference agency as defined by section 145(8) of the Consumer Credit Act 1974 (as amended);

  12. (12)

    the complainant is a person from whom the respondent has sought to recover payment under a regulated consumer credit agreement or regulated consumer hire agreement in carrying on debt-collecting as defined by section 145 (7) of the Consumer Credit Act (1974) (as amended); or

  13. (13)

    the complainant is a beneficiary under a trust or estate of which the respondent is trustee or personal representative.

DISP 2.7.7 G RP

1 27 DISP 2.7.6R (5) and DISP 2.7.6R (6) 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.

DISP 2.7.8 G RP

1 27In the Compulsory Jurisdiction, under the Ombudsman Transitional Order and the Mortgages and General Insurance Complaints Transitional Order, where a complainant:

  1. (1)

    wishes to have a relevant new complaint or a relevant transitional complaint dealt with by the Ombudsman; and

  2. (2)

    is not otherwise eligible; but

  3. (3)

    would have been entitled to refer an equivalent complaint to the former scheme in question immediately before the relevant transitional order came into effect;

if the Ombudsman considers it appropriate, he may treat the complainant as an eligible complainant.

Exceptions

DISP 2.7.9 R RP

1 27The following are not eligible complainants:

  1. (1)

    (in all jurisdictions) a firm, licensee or VJ participant whose complaint relates in any way to an activity which:

    1. (a)

      the firm itself has permission to carry on; or

    2. (ab)
    3. (b)

      the licensee or VJ participant itself conducts;

and which is subject to the Compulsory Jurisdiction, the Consumer Credit Jurisdiction or the Voluntary Jurisdiction;

  1. (2)

    (in the Compulsory Jurisdiction) a complainant, other than a trustee of a pension scheme trust, who was:

    1. (a)

      a professional client; or

    2. (b)

      an eligible counterparty;

    in relation to the firm and activity in question at the time of the act or omission which is the subject of the complaint; and

  2. (3)

    (in the Consumer Credit Jurisdiction):

    1. (a)

      a body corporate;

    2. (b)

      a partnership consisting of more than three persons;

    3. (c)

      a partnership all of whose members are bodies corporate; or

    4. (d)

      an unincorporated body which consists entirely of bodies corporate.

DISP 2.7.10 G RP

1 27In the Compulsory Jurisdiction, in relation to relevant new complaints under the Ombudsman Transitional Order and relevant transitional complaints under the Mortgages and General Insurance Complaints Transitional Order:

  1. (1)

    where the former scheme in question is the Insurance Ombudsman Scheme, a complainant is not to be treated as an eligible complainant unless:

    1. (a)

      he is an individual; and

    2. (b)

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

  2. (2)

    where the former scheme in question is the GISC facility, a complainant is not to be treated as an eligible complainant unless:

    1. (a)

      he is an individual; and

    2. (b)

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

  3. (3)

    where the former scheme in question is the MCAS scheme, a complainant is not to be treated as an eligible complainant if:

    1. (a)

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

    2. (b)

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

    3. (c)

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

DISP 2.8 Was the complaint referred to the Financial Ombudsman Service in time?

DISP 2.8.1 R RP

1 9The Ombudsman can only consider a complaint if:

  1. (1)

    the respondent has already sent the complainant its final response ; or

  2. (2)

    eight weeks have elapsed since the respondent received the complaint.

DISP 2.8.2 R RP

1 9The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service:

  1. (1)

    more than six months after the date on which the respondent sent the complainant its final response; or

  2. (2)

    more than:

    1. (a)

      six years after the event complained of; or (if later)

    2. (b)

      three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint;

    unless the complainant referred the complaint to the respondent or to the Ombudsman within that period and has a written acknowledgement or some other record of the complaint having been received;

unless:

  1. (3)

    in the view of the Ombudsman, the failure to comply with the time limits was as a result of exceptional circumstances; or

  2. (4)

    the Ombudsman is required to do so by the Ombudsman Transitional Order; or

  3. (5)

    the respondent has not objected to the Ombudsman considering the complaint.

DISP 2.8.3 G RP

1 9The six-month time limit is only triggered by a response which is a final response. A final response must tell the complainant about the six-month time limit that the complainant has to refer a complaint to the Financial Ombudsman Service.

DISP 2.8.4 G RP

1 9An example of exceptional circumstances might be where the complainant has been or is incapacitated.

Reviews of past business

DISP 2.8.5 R RP

1 9The six-year and the three-year time limits do not apply where:

  1. (1)

    the time limit has been extended under a scheme for review of past business approved by the Treasury under section 404 of the Act (Schemes for reviewing past business); or

  2. (2)

    the complaint concerns a contract or policy which is the subject of a review directly or indirectly under:

    1. (a)

      the terms of the Statement of Policy on 'Pension transfers and Opt-outs' issued by the FSA on 25 October 1994; or

    2. (b)

      the terms of the policy statement for the review of specific categories of FSAVC business issued by the FSA on 28 February 2000.

Mortgage endowment complaints

DISP 2.8.6 G RP

1 9If a 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 2.8.2R (2) to start to run.

DISP 2.8.7 R RP
  1. (1)

    19If a complaint relates to the sale of an endowment policy for the purpose of achieving capital repayment of a mortgage and the complainant receives a letter from a firm or a VJ participant warning that there is a high risk that the policy will not, at maturity, produce a sum large enough to repay the target amount then, subject to (2), (3), (4) and (5):

    1. (a)

      time for referring a complaint to the Financial Ombudsman Service starts to run from the date the complainant receives the letter; and

    2. (b)

      ends three years from that date ("the final date").

  2. (2)

    Paragraph (1)(b) applies only if the complainant also receives within the three year period mentioned in (1)(b) and at least six months before the final date an explanation that the complainant's time to refer such a complaint would expire at the final date.

  3. (3)

    If an explanation is given but is sent outside the period referred to in (2), time for referring a complaint will run until a date specified in such an explanation which must not be less than six months after the date on which the notice is sent.

  4. (4)

    A complainant will be taken to have complied with the time limits in (1) to (3) above if in any case he refers the complaint to the firm or VJ participant within those limits and has a written acknowledgement or some other record of the complaint having been received.

  5. (5)

    Paragraph (1) does not apply if the Ombudsman is of the opinion that, in the circumstances of the case, it is appropriate for DISP 2.8.2R (2) to apply.

DISP 2 Annex 1 Regulated activities at 1 July 2007

G

1 20The activities which (at 1 July 2007) were regulated activities were, in accordance with section 22 of the Act (The classes of activity and categories of investment), any of the following activities specified in Part II of the Regulated Activities Order:

  1. (1) accepting deposits (article 5);

  2. (2) issuing electronic money (article 9B);

  3. (3) effecting contracts of insurance (article 10(1));

  4. (4) carrying out contracts of insurance (article 10(2));

  5. (5) dealing in investments as principal (article 14);

  6. (6) dealing in investments as agent (article 21);

  7. (7) arranging (bringing about) deals in investments (article 25(1));

  8. (8) making arrangements with a view to transactions in investments (article 25(2));

  9. (9) arranging (bringing about) regulated mortgage contracts (article 25A(1));

  10. (10) making arrangements with a view to regulated mortgage contracts (article 25A(2));

  11. (11) arranging (bringing about) a home reversion plan (article 25B(1));

  12. (12) making arrangements with a view to a home reversion plan (article 25B(2));

  13. (13) arranging (bringing about) a home purchase plan (article 25C(1));

  14. (14) making arrangements with a view to a home purchase plan (article 25C(2));

  15. (15) managing investments (article 37);

  16. (16) assisting in the administration and performance of a contract of insurance (article 39A);

  17. (17) safeguarding and administering investments (article 40);

  18. (18) sending dematerialised instructions (article 45(1));

  19. (19) causing dematerialised instructions to be sent (article 45(2));

  20. (20) establishing, operating or winding up a collective investment scheme (article 51(1)(a));

  21. (21) acting as trustee of an authorised unit trust scheme (article 51(1)(b));

  22. (22) acting as the depositary or sole director of an open-ended investment company (article 51(1)(c));

  23. (23) establishing, operating or winding up a stakeholder pension scheme (article 52(a));

  24. (24) providing basic advice on a stakeholder product (article 52B);

  25. (25) establishing, operating or winding up a personal pension scheme (article 52(b));

  26. (26) advising on investments (article 53);

  27. (27) advising on regulated mortgage contracts (article 53A);

  28. (28) advising on a home reversion plan (article 53B);

  29. (29) advising on a home purchase plan (article 53C);

  30. (30) advising on syndicate participation at Lloyd's (article 56);

  31. (31) managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's (article 57);

  32. (32) arranging deals in contracts of insurance written at Lloyd's (article 58);

  33. (33) entering into a regulated mortgage contract (article 61(1));

  34. (34) administering a regulated mortgage contract (article 61(2));

  35. (35) entering into a home reversion plan (article 63B(1));

  36. (36) administering a home reversion plan (article 63B(2));

  37. (37) entering into a home purchase plan (article 63F(1));

  38. (38) administering a home purchase plan (article 63F(2));

  39. (39) entering as provider into a funeral plan contract (article 59);

  40. (40) agreeing to carry on a regulated activity (article 64);

which is carried on by way of business and relates to a specified investment applicable to that activity or, in the case of (20), (21), (22) and (23), is carried on in relation to property of any kind.