MIGI 18.2 The Financial Ombudsman Scheme (FOS)

The FOS has been set up to resolve disputes between consumers and firms. Its decision making is independent of the FSA. The FOS provides a mechanism for resolving disputes which is a simple, informal and accessible alternative to the courts. FOS's compulsory jurisdiction covers complaints against authorised firms concerning their regulated activities and certain other specified financial services activities. It is provided free of charge to complainants. FOS's decisions are based on what is 'fair and reasonable' and are binding on firms if a complainant accepts them. The rules relating to the FOS are in DISP. Furtherinformation aboutthe FOS can also be found on their website at www.financial-ombudsman.org.uk.

The compulsory jurisdiction of the FOS will be extended to include mortgage and insurance intermediaries. Firms will be required to contribute to the funding of the FOS. We have not yet finalised all our rules on how the FOS will apply to mortgage and insurance intermediaries. We are currently consulting on the detailed funding arrangements for the FOS in CP 04/4. So, we plan to update this Chapter later in the year when we have finalised our rules.