Financial services

Consumer redress

It is essential that financial services regulation is robust and includes an effective means of redress for consumers should they be unfairly treated. The UK has two bodies that underpin the protection of consumers. The first of these is the Financial Ombudsman Service and the second, the Financial Services Compensation Scheme (FSCS).

The Financial Ombudsman is an independent body that provides impartial investigation and ruling in complaints against UK financial services providers. Its existence is set in statute by the Financial Services and Markets Act (2000), and allows consumers to have access to a free service to settle their complaints and examine whether or not they have been fairly treated by their financial providers.

The Ombudsman is funded by financial services firms regulated in the UK, via a regular levy. Additionally, individual case fees are paid by firms that are subject to a complaint.

The Financial Services Compensation Scheme (FSCS) is the UK's compensation fund “of last resort”, available to consumers who have bought financial services products from firms regulated in the UK. The FSCS offers protection to consumers across the spectrum of financial services – bank account deposits, insurance, investments, and mortgages.

The FSCS is independent of Government and, like the Ombudsman, was set up as a result of the Financial Services and Markets Act. In particular, the FSCS provides protection for bank-account holders. From 31 December 2010, new rules increased the level of protection, with customers having the sterling equivalent of the first €100,000 of their total deposit protected by the scheme. The FSCS covers all banks and building societies in the UK.

Consumer redress

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Financial services and the consumer index