The term FOS or Financial Ombudsman Service is one which is used regularly with regards to issues such as financial dispute settlements, especially when dealing with claims for PPI compensation from a lender or bank. But do you really know what FOS is exactly and how it operates in the UK? Below, we shed some light on it for your clarity.
Financial Ombudsman Service
The Financial Ombudsman Service (FOS) is an ombudsman in the United Kingdom. It was established in the year 2000 and given statutory powers in 2001 by the Financial Services and Markets Act 2000. Its main objective is to settle disputes between consumers and UK-based businesses providing financial services for issues with banks, insurance companies, investment firms and finance companies.
What are the Services provided by the FOS?
The FOS deals with various types of complaints from consumers about most financial matters including banking, insurance, mortgages, pensions, savings and investments, credit cards and store cards, and loans or credit.
Before the FOS can step in, the consumer must first give the business they are unhappy with the opportunity to look into the complaint themselves. The businesses have a maximum of 8 weeks to resolve the complaint. If they do not resolve it within the given time limit of 8 weeks or if the consumer is not happy with the response, then they can refer the complaint to the ombudsman service.
How Does the FOS Operate?
The Financial Ombudsman Service treats each case differently and makes decisions on the basis of what is believed to be fair and reasonable in the particular circumstances of each case. In making decisions on individual complaints, the law in the UK requires the FOS to take the relevant law and regulations, regulator’s rules, guidance and standards, and codes of practice into account to operate.
While the FOS deals with all types of consumer complaints, PPI compensation claims are the most common types of complaints which are received. Recently, the FOS reported that it had dealt with more than 400,000 unresolved cases in which banks had refused compensation when customers complained to them.
So, why are claims for PPI refunds so common and frequent? It is in fact because PPI (Protection Payment Insurance) was sold widely across the UK by various banks, often using misleading sales practices, alongside personal loans, mortgages and credit cards. The policies were meant to cover payments if customers were sick, unemployed or unable to meet their repayments for other specified reasons. But eventually, upon requirement, the banks did not pay out or the buyer did not qualify in the first place to receive the money covered.
Why Claim for PPI And How Does the FOS Help with Receiving a PPI Refund?
There are still millions of mis-sold PPI policies out there amongst the general public for which no claim has yet been made. As an ombudsman, the FOS want do everything possible to ensure that rightfully owed consumers claim back their mis-sold PPI before it is too late.
Initially, PPI appeared to be a good thing as the insurance policy would meet the repayments for the customer if they fell behind with their repayments due to a sudden loss of income that was caused due to illness, accident or unemployment.
But the product was widely mis-sold to millions of people across the UK who did not know that they were being sold PPI and they were charged for it without being able to utilise. This resulted in one of the biggest banking scandals of all time. Banks and lenders have so far set aside more than £22 billion to compensate people who were mis-sold policies and the bill is still expected to rise with time.
Who Can Claim?
If your answer is “yes” for any of these quick questions below, you too may be one of the millions of people who were mis-sold the product.
- Were you pressured into taking out PPI?
- Was payment protection added to your agreement without your consent?
- Did your money lender fail to fully explain the costs of PPI to you?
- Were any periods of time during your financial agreement excluded from your cover?
- Were you self-employed, retired, unemployed or in part-time work at the time of the PPI sale?
- Did you have a pre-existing medical complaint at the time of taking out the loan?
How to Claim PPI Yourself
If you have found that you have been mis-sold PPI on some or all of your loans or credit cards, you have the option of hiring a firm that specialises in PPI claims, or alternatively you can handle the claim yourself with the assistance from the FOS.
Following are the steps you will need to take when filing your own PPI claims with the FOS:
Once you establish that the PPI was mis-sold you can call your lender or register a complaint by mail. You can also complete a questionnaire provided by the Financial Ombudsman and send it to your lender, by going to their website and downloading the questionnaire. If you dealt with any of the major banks, such as Barclays or Lloyds, you can go to their website as well for information on contacting them for a complaint.
If you receive any offer for a refund you should confirm the amount.
If you have found that the amount is incorrect (by checking your own statements or loan agreements) you will need to get in touch with the FOS to file a complaint about it. If you do not receive any positive results by using the ombudsman services you can still challenge the results.
If you find the whole task of making a claim with the FOS daunting and time consuming, you can always choose to alternatively employ the services of a claims management company like iSmart Consumer Solutions, who can do the required work for you on a No Win No Fee basis.
We pursue claims directly with banks and lenders on behalf of our clients and if necessary we also escalate complaints to the Financial Ombudsman Service. Typically, the claims process takes around 5 months, although individual claims can take longer or shorter amounts of time depending on individual cases. You can either complete the application online, or call us to start the process. We will provide an insight on your case and will ensure that you receive your refund as quickly as possible and in the most hassle-free way.
Hurry! Claim Deadline Announced
29th August 2019
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