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The Financial Ombudsman Service (FOS) has confirmed a package of reforms designed to modernise how complaints are handled. The reforms focus on:
- Introducing a new registration stage before investigation.
- Clarifying and expanding dismissal powers.
- Updating the “fair and reasonable” test used in complaint decisions.
1. New Registration Stage
The Financial Ombudsman Service (FOS) will introduce a formal preregistration and registration process to ensure that complaints are “ready to investigate” before they progress to a full investigation. The aim of the new approach is to improve the efficiency and consistency of the complaints process by ensuring that the key information required by FOS is available at an earlier stage. By doing so, FOS expects to reduce the need for repeated information requests, minimise delays caused by incomplete case files and enable complaints to move through the system more quickly and effectively.
Importantly, FOS has emphasised that the new registration stage is not intended to create a higher evidential threshold for consumers or restrict access to redress. Rather, it is designed to distinguish between assessing whether a complaint is sufficiently developed to be investigated and making any judgement on the merits of that complaint. The service has made clear that readiness for investigation should not be confused with the eventual outcome of a case. To support implementation, FOS will initially pilot the process for fraud and scam complaints from October 2026, with wider rollout expected to align with future reforms to the FOS case-fee framework.
The rationale for the change is based on operational challenges identified by FOS through its case management data. According to FOS, complaints that lack key information take, on average, more than three weeks longer to reach a first assessment than those that are complete when received. In addition, more than one in five complaints currently move backwards from the investigation stage because further information is required before meaningful progress can be made. FOS has also reported that more than 10% of the 225,000 complaints resolved during 2024/25 were either withdrawn or abandoned before reaching a first assessment. Through the introduction of a structured registration process, FOS aims to reduce these inefficiencies, improve the experience for consumers and firms, and make more effective use of its investigative resources.
2. Updated dismissal powers
Alongside the introduction of a new registration stage, the Financial Ombudsman Service (FOS) is making significant changes to its dismissal powers with effect from 1 October 2026. The reforms are intended to provide greater clarity, consistency and efficiency in the way complaints are managed, while ensuring that FOS resources remain focused on cases that can be investigated and resolved fairly and effectively.
A key principle underpinning the new framework is that dismissal powers will remain discretionary rather than automatic. FOS has repeatedly emphasised that dismissal decisions should not be used as a substitute for assessing the merits of a complaint, nor should they create barriers to legitimate redress. Instead, the reforms are designed to provide clearer mechanisms for addressing complaints that have already been appropriately reviewed elsewhere, are more suitable for another forum, involve unreasonable conduct, or otherwise fall outside the intended scope of the Ombudsman service. Throughout the consultation response, FOS stressed that vulnerability, reasonable adjustments and individual customer circumstances will continue to be important considerations when exercising these powers.
For firms, the revised dismissal framework presents an opportunity to achieve greater certainty and finality in complaint handling, particularly where matters have already been subject to regulatory reviews, consumer redress schemes or previous FOS consideration. However, it also reinforces the importance of maintaining robust complaint records, evidencing review outcomes and ensuring that customer circumstances have been properly considered, as FOS will continue to retain discretion to investigate cases where it considers that fairness requires further examination.
| Complaint or complainant conduct |
FOS may dismiss complaints that are:
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| Previous reviews or redress exercises |
FOS may dismiss complaints where:
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| Repeat complaints |
FOS may dismiss complaints already considered unless there is:
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| Other forums |
Complaints may be dismissed if:
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| Scope exclusions |
FOS will reintroduce grounds to dismiss complaints relating purely to:
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| Multiple complainants |
FOS retains the ability to dismiss complaints where all eligible parties have not consented to proceed, while keeping safeguards for domestic abuse and vulnerability cases. |
| “Other compelling reasons” |
A broad residual power will remain. Following consultation feedback, FOS amended a proposal so that complaints are not dismissed simply because financial loss is considered “immaterial”. Instead, the test becomes whether the complainant suffered any financial loss, or material distress or inconvenience. |
3. Fair and Reasonable Test
FOS has partially adopted reforms to DISP 3.6.4R.
What changes?
Fos will clarify that decisions should be based on laws and regulations, FCA rules and guidance. Relevant codes of practice and good industry practice as they existed when the act or omission occurred.
What does not change?
FOS has decided not to remove “good industry practice” from the test at this stage as the issue is being considered through the Financial Services and Markets Bill. FOS believes removing it now could create uncertainty and conflict with ongoing Parliamentary scrutiny.
This was one of the most debated consultation topics: industry generally wanted greater certainty and supported removal, consumer groups argued it remains important to ensure fairness, particularly for vulnerable consumers and emerging harms.
Vulnerability Considerations
FOS conducted an Equality Impact Assessment and identified that the proposed reforms could create unintended barriers for certain groups of consumers, particularly older people, disabled consumers, ethnic minority groups, victims of domestic or economic abuse, and individuals with low levels of digital literacy. The assessment recognised that changes to complaint registration, evidence requirements and dismissal powers could disproportionately affect consumers who may already face challenges in accessing financial services or navigating complaints processes.
To address these risks, FOS has committed to ensuring the redesigned process remains accessible and inclusive. This includes maintaining non-digital channels such as telephone and postal communications, allowing flexibility in evidential requirements where consumers are unable to provide information, continuing to offer reasonable adjustments for vulnerable customers and those with protected characteristics, and using clear, plain-English communications throughout the complaints journey. FOS will also pilot and test the new registration process before full implementation to identify and address any unintended consequences. In addition, it has committed to ongoing monitoring of outcomes and impacts on protected groups to ensure the reforms do not create disproportionate barriers to access to redress.
What this means for firms
Benefits for Firms
The reforms should provide firms with greater procedural clarity regarding how complaints progress through the Financial Ombudsman Service (FOS). The introduction of a structured registration stage creates a clearer framework for when a complaint is considered ready for investigation, enabling firms to better understand evidential expectations and manage complaint lifecycles more effectively. This should improve predictability and reduce uncertainty in interactions with FOS.
The new approach is also expected to facilitate earlier identification of incomplete complaints. By ensuring that key information and supporting evidence are gathered before a case is formally registered for investigation, firms will have greater visibility of potential gaps at an earlier stage. This should reduce the incidence of complaints moving backwards through the process and minimise repeated information requests, resulting in a more efficient experience for both firms and customers.
Over time, these changes have the potential to shorten complaint resolution times. FOS has identified that cases requiring extensive follow-up for information can take significantly longer to reach an initial assessment. A more structured front-end process should allow investigators to focus on the substantive issues sooner, reducing delays and supporting quicker outcomes for customers and firms alike.
The expanded dismissal framework also introduces greater finality where complaints have already been reviewed through recognised regulatory reviews, consumer redress schemes or previous FOS consideration. Firms that have undertaken robust and compliant review exercises may benefit from reduced duplication and a lower likelihood of issues being repeatedly revisited. This not only improves operational efficiency but also increases certainty over previously remediated matters.
Similarly, the revised dismissal powers are intended to reduce duplicate consideration of complaints that have already been dealt with elsewhere, such as by comparable dispute resolution schemes, courts or regulatory processes. By establishing clearer boundaries between FOS and other routes to redress, firms may experience fewer parallel investigations and reduced costs associated with defending the same issue in multiple forums.
Considerations for Firms
While the reforms offer several potential benefits, they will also require firms to review and potentially redesign aspects of their complaints operating models. One of the most significant changes is the likelihood that firms will need to provide more complete information and supporting evidence earlier in the complaint journey. This may require improvements to record management, complaint file quality, MI capabilities and document retrieval processes to ensure cases can meet FOS’s readiness criteria efficiently.
The concept of complaint readiness is likely to become a more important operational and governance consideration. Firms will need to consider whether their existing complaint handling processes consistently capture the information FOS is likely to require at registration. This may involve updating complaint investigation methodologies, strengthening quality assurance frameworks and improving the consistency of final response letters and supporting evidence packs. Firms that can present well-structured, well-evidenced complaint files may be better positioned to achieve faster and more efficient outcomes under the new framework.
Firms should also recognise that these reforms are not yet the final stage of the FOS modernisation agenda. FOS has made clear that implementation of the registration process will be linked to forthcoming consultations on
case fees and broader operational changes. As a result, firms should continue to monitor regulatory developments, future guidance, implementation plans and fee model consultations to ensure they remain aligned with evolving expectations and can adapt their operating models accordingly.
Finally, firms should consider the strategic implications of the enhanced focus on vulnerability, accessibility and customer support throughout the complaint journey. FOS has repeatedly emphasised that the new framework must not create barriers to access for vulnerable consumers. Organisations will therefore need to demonstrate that their complaint processes, evidential requirements and customer communications remain consistent with Consumer Duty principles and adequately support customers who may require additional assistance or reasonable adjustments.
Implementation Timescales
The Financial Ombudsman Service (FOS) has adopted a phased approach to implementing the modernisation reforms, recognising the need for operational testing and alignment with wider changes to the complaints and funding framework.
October 2026: Registration Process Pilot
The first stage of implementation will be the launch of a pilot registration process for fraud and scam complaints. This pilot will allow FOS to test how the preregistration and registration stages operate in practice, refine its processes and identify any unintended impacts on consumers, firms or case outcomes before wider deployment.
1 October 2026: New Dismissal Powers Take Effect
The revised dismissal framework will come into force from 1 October 2026. From this date, FOS will begin applying the expanded and clarified dismissal powers, including those relating to repeat complaints, complaints more appropriately dealt with by other forums, matters already considered through redress schemes and complaints involving unreasonable conduct.
From October 2026 Onwards: Monitoring and Refinement
Following implementation, FOS will continue to monitor the operation of both the registration pilot and the revised dismissal framework. Particular attention will be given to the impact on vulnerable customers and protected groups, as well as the effectiveness of the reforms in reducing delays and improving case progression.
Future Implementation: Wider Rollout of Registration Process
FOS has confirmed that full implementation of the registration model will not occur immediately following the pilot. Instead, wider rollout will be aligned with future reforms to the FOS case-fee model and associated operational changes. Further guidance and consultation are therefore expected before the registration process becomes fully embedded across all complaint types.
Ongoing Regulatory Developments
Firms should also note that the wider debate regarding the scope of the “fair and reasonable” test remains subject to ongoing legislative consideration through the Financial Services and Markets reform agenda. As a result, further changes to the FOS framework may emerge over the coming years, making continued monitoring of regulatory developments essential.
Timeline at a Glance
| Date | Milestone |
|---|---|
| August 2026 | FOS publishes final policy statement |
| 1 October 2026 | Revised dismissal powers come into effect |
| October 2026 | Registration process pilot begins for fraud and scam complaints |
| 2026-27 | Pilot evaluation, operational refinement and impact monitoring |
| Future date (TBC) | Full rollout of the registration process aligned with case-fee reforms |
| Ongoing | Further guidance, consultation and potential legislative developments |
For firms, the practical implication is that the dismissal reforms will require immediate attention during 2026, while the registration reforms provide a window to assess complaint handling processes, case file quality, evidence gathering and complaint readiness capabilities before full implementation.
Executive Takeaway
The reforms are intended to improve efficiency, earlier case management and stronger finality in the redress system, whilst maintaining access to redress through discretion and vulnerability safeguards. The most significant practical changes are the future registration stage and the broader dismissal powers. FOS has taken a cautious approach on the fair and reasonable test, retaining “good industry practice” as a consideration pending the outcome of Parliamentary legislation.
Simon Brown
Advisory Lead
Simon Brown has over 20 years’ experience delivering compliance solutions across the consumer finance sector. He specialises in designing, developing, and enhancing compliance frameworks, with deep expertise in the FCA’s conduct rules for Consumer Credit and in building effective compliance programmes that balance regulatory requirements with commercial priorities.