The Financial Ombudsman Service (FOS) has amended the Dispute Resolution: Complaints sourcebook (DISP) in the FCA Handbook. FOS has made these amendments to reflect the Alternative Dispute Resolution Directive which had to be implemented by EU member states by 9 July 2015.
Amongst the various amendments to DISP the key changes for firms to be aware of are:
- Eligible complainants;
- When a complaint will be considered without the FOS considering the merits; and
- What content must be set out in a firm's final response;
Who can complain?
A professional client or eligible counterparty may now refer a complaint to the FOS if they were acting as a consumer in relation to the matter that gave rise to their complaint. Previously, these categories of complainants were excluded.
Dismissal without consideration of the merits
The new DISP rules restrict the instances in which an ombudsman may dismiss the complaint without considering the merits to the following reasons:
- The complaint is frivolous or vexatious;
- The subject matter of the complaint has been, or is being, dealt with by another comparable ADR entity;
- There is a court decision on the merits of the subject matter of the complaint;
- There is ongoing court proceedings dealing with the subject matter of the complaint unless the proceedings are stayed or sisted so that the matter may be considered by the FOS; or
- Dealing with this type of complaint would seriously impair the effective operation of the FOS (the DISP rules provide some guidance as to the types of complaint that may fall into this category).
In addition to the previous requirements a final response by a firm to a complaint must now also include the following:
- Provide the FOS website address
- Firms must indicate whether they consent to waive the relevant time limits set out in DISP 2.8.2 R or DISP 2.8.7 R by including the appropriate wording set out in DISP 1 Annex 3 R.
It is important that firms note these and all other DISP changes that came into force on 9 July 2015. Firms must update their model final response letters to ensure that they are compliant with the DISP rules. These rules will have a bearing on the ways firms approach complaints that they receive and complaints that are referred to the FOS