Miscellaneous The Ombudsman scheme
The Financial Ombudsman Service (FOS) was established by FSMA 2000 to provide for the proportionate, prompt and informal resolution of disputes between consumers or small businesses and financial services firms regulated by the FCA. The FOS offers a cost-free service for consumers, which is fundamental to its purpose.
	The FOS is able to charge case fees to "respondents", meaning firms which are subject to a complaint, and is responsible for making case fees rules. This may include when firms should be charged, for example from the first case or after a certain number of cases. Changes to these rules are subject to approval by the FCA.
	Claims management companies (CMCs) and other professional representatives bring complaints to the FOS on behalf of eligible complainants, including consumers. As these firms are acting on behalf of complainants, they are not classified as respondents and cannot be charged fees by the FOS under the current arrangements. However, CMCs and other professional representatives are not themselves eligible complainants, and are able to gain financially from bringing cases to the FOS as they charge eligible complainants for their services. There is currently minimal financial risk to CMCs in bringing large numbers of complaints to the FOS, regardless of the merits of those cases.
	Section 63 enables HM Treasury, by regulations, to add further categories of persons to the list of those to whom the FOS can charge case fees. HM Treasury intends to amend the list to allow the FOS to charge case fees to CMCs and other professional representatives engaged in claims management activities relating to the FOS.
	By specifying who can be charged by the FOS in regulations, the government intends to ensure that the full range of claims management models can be effectively captured. It also provides flexibility to amend this list if different models emerge in future, to maintain the original policy intent. It will also allow government to ensure that bodies which play a valuable role in offering support to vulnerable people – for example charities and law centres – will not be charged case fees by the FOS.
	This new power cannot be used by HM Treasury to add eligible complainants to the list of those to whom the FOS can charge case fees. This will ensure that the FOS remains a free service for consumers.
	Regulations made under this power will be subject to the affirmative procedure and HM Treasury has a duty to consult the FOS prior to making regulations. The FOS is required by legislation to consult on changes it makes to its case fee rules, which are also subject to approval by the FCA.