With immediate effect from Monday 1 April 2019, new FCA rules have more than doubled the maximum amount which the Financial Ombudsman Service (FOS) can award against regulated businesses from £150,000 to £350,000 per complaint.
There is also a small increase to £160,000 for complaints about acts or omissions by firms which took place before 1 April 2019, and which are referred to FOS on or after 1 April 2019.
The new rules will also ensure that, from 1 April 2020 onwards, both award limits are automatically adjusted each year in line with inflation, as measured by the Consumer Prices Index (CPI).
For any complaints referred to FOS before 1 April 2019, the limit will remain at £150,000.
Also with immediate effect, the FCA has significantly enhanced the number of eligible complainants, in addition to micro-enterprises, individual investors and consumers, and certain SMEs, by:
- relaxing the eligibility criteria for SMEs so that they only have to meet the annual turnover test of under £6.5m and one of either the headcount (fewer than 50 employees) or balance sheet total (£5m) tests, rather than all three; and
- extending the eligibility criteria to charities, trusts and personal guarantors of loans to a business.
The FCA estimates that the relaxation for SMEs will mean that around 210,000 additional SMEs will have access to FOS.
New FCA rules have more than doubled the maximum amount which the Financial Ombudsman Service (FOS) can award against regulated businesses