Ombudsman compensation is a term used to refer to the money paid by financial service providers to individuals who win complaints against them. Ombudsman services are free, independent, and impartial dispute resolution services that investigate complaints from unsatisfied customers. If you have a complaint about a financial service provider, you should escalate it through the provider’s internal complaints procedure first before approaching the ombudsman. However, if the provider cannot resolve the complaint to your satisfaction, you have the right to refer the matter to the ombudsman for further investigation.
In the UK, the Financial Ombudsman Service (FOS) is responsible for investigating complaints against financial service providers. The FOS was established by the Financial Services and Markets Act 2000 and its services are free to use. The FOS is impartial and not affiliated to any financial service provider.
When you make a complaint to the FOS, they will investigate your complaint and evaluate the facts to determine if the financial service provider did something wrong. If they find that the provider is responsible for your complaint, they will order the provider to take remedial action or pay compensation.
Ombudsman compensation is awarded by the FOS for financial loss, material damage, inconvenience, distress, and other non-financial losses that you have suffered as a result of the provider’s actions. The amount of compensation you can receive will depend on the severity of your losses. The FOS considers each case on its own merits, and there is no set formula for calculating compensation.
For example, if you lost money due to the provider’s negligence, the ombudsman might order the provider to reimburse you for your losses, cover any expenses you incurred, and pay you compensation for the inconvenience and stress caused by the provider’s actions. If you were mis-sold a financial product, the provider might be ordered to refund the premiums you paid, plus interest, and pay you additional compensation for any inconvenience and stress caused.
It’s worth noting that the FOS has a financial compensation limit. For the year 2021/2022, the limit is £355,000 per complaint. If your losses exceed this limit, you might need to pursue other legal avenues to recover your losses.
It’s also worth noting that if the ombudsman finds that you were partly responsible for your losses, they might reduce the amount of compensation you receive. This is called contributory negligence and means that you were partly to blame for the situation that caused your losses.
If you’re unhappy with the ombudsman’s decision, you have the right to appeal their findings. You can appeal to an independent assessor who will review your case and the ombudsman’s decision. The assessor has the power to overrule the ombudsman’s decision if they find that the decision was wrong in law or principle.
In conclusion, ombudsman compensation is awarded to individuals who have suffered financial loss or other damages as a result of a financial service provider’s actions. It is awarded by the Financial Ombudsman Service (FOS), an independent and impartial dispute resolution service that investigates complaints from unsatisfied customers. The amount of compensation awarded depends on the severity of your losses, and there is no set formula for calculating compensation. If you’re unhappy with the ombudsman’s decision, you have the right to appeal their findings.
As a customer of a financial service provider, it’s important to know your rights and options for resolving disputes. If you have a complaint about a provider, escalate it through their internal complaints procedure first, before turning to the ombudsman. The ombudsman is a free service that can help you resolve your disputes with financial service providers, ensuring that you get the compensation you deserve if they are found to be at fault.