FOS case volumes drop as new charging model takes effect

The Financial Ombudsman Service (FOS) has reported a sharp fall in new complaints, as its latest data shows the number of cases brought by professional representatives – including law firms and claims management companies – has collapsed following the introduction of a new charging model.

Between July and September 2025, the FOS received 46,300 new complaints, down 37% year-on-year from 73,700 during the same period in 2024. The drop also marks a decline from the 68,000 cases received between April and June 2025, signalling a continued downward trend.

The fall coincides with the introduction of a £250 case fee for professional representatives, designed to ensure complaints are properly evidenced and have reasonable prospects of success before being referred. Representatives can bring up to ten cases free of charge each financial year, after which the fee applies. If a complaint is upheld, £175 of the fee is credited back to the representative.

Professional representatives accounted for just 4,300 cases in the latest quarter – compared to 37,100 a year earlier – while a growing share of complaints are now being brought directly by consumers.

FOS said that while overall case volumes have dropped, a higher proportion of referred cases are being investigated and upheld, suggesting representatives are now applying stronger due diligence before escalating cases.

James Dipple-Johnstone, Interim Chief Ombudsman, said:

“The changes we have already introduced – and those we plan to make in the future – will allow us to focus on getting back to our core purpose for customers as a quick, informal and impartial alternative to the courts for resolving disputes.”

Complaint patterns shift

Complaints relating to motor finance commission and irresponsible or unaffordable lending, which had been heavily driven by mass claims activity, have fallen sharply.

• The FOS received 2,200 motor finance complaints in the second quarter, down from 9,500 a year earlier, reflecting the impact of the Financial Conduct Authority’s complaints-handling pause and plans for a redress scheme.
• Complaints about irresponsible lending also dropped steeply to 4,500, from 24,900 in the same period last year.

With these categories declining, current accounts have returned to being the most complained-about product, attracting 7,900 complaints, mainly concerning fraud, scams, and customer service issues. That compares to 9,200 in the same period last year.

Across all products, the uphold rate has remained steady at around one-third of complaints.

Product	Q2 2024/25	Q1 2025/26	Q2 2025/26
Current accounts	9,200	7,800	7,900
Hire purchase (motor)	11,800	24,300	4,900
Credit cards	22,400	6,600	4,700
Car or motorcycle insurance	3,400	2,800	3,200
Electronic money (e-money)	2,200	1,700	2,200

Policy changes and future plans

The FOS became the first UK ombudsman to introduce charges for professional representatives earlier this year, part of a wider effort to modernise dispute resolution in partnership with the Treasury and Financial Conduct Authority (FCA). The move aims to encourage earlier resolution of complaints by firms and ensure access to a “quick and high-quality alternative to the courts.”

The ombudsman is also consulting on proposals to simplify its billing process, including a shift from a “free case” allowance to a monetary allowance, and expanding quarterly advance billing to more businesses, including representatives. The FOS said this would ensure “a fairer system” where all representatives receive the same benefit, regardless of case outcomes.