FOS Compensation Limit Raised to £150,000

The compensation limit at the Financial Ombudsman Service is set to go up from £100,000 to £150,000 on 1 January 2012. This is good news for consumers, as the £100,000 limit has existed for the past 30 years within various organisations without change, but the potential problem is that of small businesses encountering problems getting insurance for over £100,000.

The Ombudsman Service currently calculates that the level of compensation due to consumers exceeds the present limit of £100,00 in roughly 300 cases per year, of which only £100,000 can be compensated for.

The FSA also recently announced the results of its consultation on a number of changes to its dispute resolution rules. For example, from July 2012 it will replace its current two-stage complaints systems with a single-stage system, due to the possibilities of misuse. Other new rules include a requirement that a firm nominates a board member to be in charge of complaints. The FSA has given out two fines in the last five months for poor handling of complaints, being £3.5 million for Bank of Scotland and £2.8 million for Royal Bank of Scotland/NatWest.


 

Oliver Kew

Published on 17/06/2011