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10 key points to note from the FOS Annual Review 2017/18

On 30 May 2018, the Financial Ombudsman Service published its annual review for 2017/18.

The annual review looks at the level and type of complaints handled by the FOS over the past 12 months.  It also highlights any trends or themes the FOS has seen.  The FOS' three key themes are: vulnerability, challenges from new services and loyalty and trust.  

Here's our 10 key points from the review:

  1. Consumer credit complaints have increased by 40% in the last 12 months (and there was an 89% rise in the previous year). The FOS suggests some lenders are not doing enough to make sure borrowing is sustainable.

  2. High-cost credit complaints have reached a record level (and over half of complaints are about pay day loans). The FOS is currently upholding 6 out of 10 complaints made about pay day lending. The FOS has been sharing the information with the FCA.

  3. New technologies and changes in how people manage their money has led to certain complaints. For example, there have been increased complaints by people who have lost out because of fluctuations in the value of cryptocurrencies, consumers taking car insurance with a 'black box' and complaints involving new methods of payment services.

  4. PPI remains a key area; 55% of all complaints received in 2017/18 involve PPI. The total number of PPI complaints considered by the FOS is now over 1.6 million.The FOS says dealing with PPI mis-selling has been a significant and long-term challenge.

  5. The FOS is introducing new technology and IT systems to support a new case handling system. The new technology includes an online portal (which will be launching in 2018) which will allow information to be shared more quickly and securely.

  6. The FOS accepts it needs to "listen, learn and improve". It notes the independent review currently being carried out by Richard Lloyd (which is due to be published in June 2018).

  7. The FOS continues to receive a number of complaints from people who have become the victim of fraud (including payment fraud).

  8. The FOS has noticed an increasing number of complaints about data protection. It accepts there is likely to be an increase of these following the introduction of the EU General Data Protection Regulation on 25 May 2018.

  9. The FOS receives 200 complaints a month about insurance pricing and consumers being unhappy about rising premiums.

  10. The FOS is preparing for a likely increase in its scope.This includes (a) dealing with claims management company complaints when regulation of those businesses transfers to the FCA in 2019 and (b) the likely expansion in the definition of eligible complainant (and an FCA policy statement is expected in summer 2018).


The FOS' remit seems likely to expand over the next twelve months.  It will also need to deal with new types of complaints from different types of customers and on a broader range of issues.  The FOS accepts this is a likely consequence of the increased technological advances in banking services.

In the course of the next 18 months, the FOS will also consult with firms on what the appropriate future funding model will look like. As the FOS continues to expand and adapt, firm's complaint handling teams will need to follow suit. Caroline Wayman (chief ombudsman and chief executive) sums up the challenge faced by all in the industry by saying "for us – like the financial services sector – standing still is not an option".

For more information please contact Russell Kelsall, Warren Clark or Alanna Tregear

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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