The Finance & Leasing Association has today welcomed the
publication of various consultations about reforming the UK
redress system.
The joint consultation between the Financial Ombudsman Service
(FOS) and Financial Conduct Authority (FCA) includes proposals to
ensure consistency in the interpretation of regulations, while
the Treasury consultation proposes to introduce a ten year
backstop for FOS complaints, and to adapt the Fair and Reasonable
test so that firms can have confidence that, where conduct
complained of is in scope of FCA rules, compliance with those
rules, in accordance with the FCA's intention for what those
rules should achieve, will mean that the FOS is required to find
a firm has acted fairly and reasonably.
Also, the FOS has announced that, having previously consulted on
the interest rate it applies to compensation awarded to
consumers, it now intends to change that rate from the
longstanding 8%, to Bank of England Base rate +1%.
Stephen Haddrill, Director General of the FLA said:
“The direction of travel contained in these proposals show a much
more certain, consistent and confident dynamic between the FOS
and FCA, which will benefit firms and consumers alike.
“I commend the Government and individual bodies on the speed and
determination with which they have begun to change dysfunctional
regulatory relationships.
“We look forward to working with Government, the FCA and FOS to
ensure these changes are implemented as quickly and effectively
as possible. The credit industry is vital to the health of the
economy and how people manage their individual budgets – the
sooner these changes come into effect, the more the industry can
do to enhance even further its contribution.”
Notes to Editors
- In 2024, FLA members provided £155 billion of new finance to
UK businesses and households. £115 billion of this was in the
form of consumer credit representing almost a third of total new
consumer credit written in the UK in 2024.
