frequently-asked questions
This section answers a number of frequently-asked questions (FAQs) about:
information for researchers
funding
how is the Financial Ombudsman Service funded?
We are funded by levies and case fees which businesses we cover have to pay by law. Consumers do not pay to bring a complaint to the ombudsman. And we receive no government funding. (We are given statutory powers – the Financial Services and Markets Act 2000 and Consumer and Credit Act 2006 – but we are not a government body. )
All businesses covered by the ombudsman service pay a levy, to contribute to our costs. The amount of levy that each individual business has to pay can range from around £100 a year for a small firm of financial advisers to over £300,000 for a high-street bank or major insurance company. Where a business has had no formal complaints referred to the ombudsman service, the levy is still payable. This is because all businesses benefit from the increase consumer confidence the existence of the ombudsman service brings – and the ombudsman service's funding covers much more than closing cases. We carry out a lot of complaints prevention work aimed at helping to prevent problems turning into full-blown disputes. For example, we publish a regular newsletter ombudsman news and an extensive series of factsheets for consumers and guides for businesses.
A business also has to pay an individual case fee, when we handle a complaint about it and the case becomes "chargeable" under our rules. However, all businesses covered by the ombudsman service are entitled to a number of "free" cases. Case fee arrangements are reviewed each year and subject to change. In 2008/09 a business does not have to pay a case fee for the first three cases against it each year. For the fourth and each subsequent complaint we close each year, the business has to pay a case for of £450.
But this case fee will almost certainly be less than the costs that a business would face, if the customer took their complaint to court instead.
In January each year we consult publicly on our proposed corporate plan and budget – including the amount to be raised through the levy and the level of our case fee.
For more details see our special factsheet: