The Farce of Free Consumer Protection: How the FOS and PIMFA Are Failing the Public

In the labyrinth of financial regulation, where promises of consumer protection are more often than not just smoke and mirrors, the Financial Ombudsman Service (FOS) and PIMFA—the so-called protectors of the public—are playing a particularly farcical game. It’s a tragicomedy, really, where the punchline, as always, is on the consumer.

FOS: Free in Name, Costly in Practice

The FOS was conceived as a beacon of justice, a free service where the wronged consumer could seek redress without fear of cost or complication. In practice, however, it’s become anything but free. The FOS has morphed into a bureaucratic nightmare, a place where even the simplest of complaints requires the expertise of professional representatives or Claims Management Companies (CMCs)—and here’s the kicker: those professionals don’t come cheap. So much for the free resolution service we were promised.

Recent data shows that nearly half of the complaints submitted to the FOS come from these professionals, and while the FOS is quick to point out that these complaints don’t always yield better outcomes for the consumer, they conveniently sidestep the fact that these representatives exist because the FOS process is so convoluted that the average consumer can’t navigate it alone. It’s almost as if the system is designed to make sure consumers fail unless they pay for help—some free service this is turning out to be.

PIMFA: Protecting Firms, Not Consumers

And then there’s PIMFA, the trade body for financial advisers, which should, in theory, be upholding consumer interests. Instead, they’ve been working hard to protect their own—by proposing a hefty increase in fees for CMCs, of course. Their argument? The current £250 fee isn’t enough to deter these companies from submitting claims, so let’s bump it up to £450 and split it between the CMCs and the firms. It’s a brilliant plan, really—if your goal is to protect firms from pesky consumers looking for justice.

Simon Harrington, PIMFA’s head of public affairs, even has the nerve to suggest that CMCs offer no real benefit to consumers, despite the overwhelming evidence that consumers often can’t handle these disputes on their own. His vision of “equity” is less about fairness and more about shielding firms from the financial inconvenience of dealing with complaints.

A Betrayal of Public Duty

What we’re seeing here is a betrayal of the very principles that the FOS and PIMFA were supposed to uphold. The FOS, with its increasingly opaque and costly process, and PIMFA, with its relentless lobbying to make it harder for consumers to seek redress, are prioritising the interests of firms over those of the public. This is not just a breach of public duty—it’s a clear sign that these institutions have lost sight of their original purpose.

Conclusion: A Call for Accountability

It’s high time we called out the FOS and PIMFA for what they’ve become: institutions more interested in protecting the financial well-being of their members than in serving the public. The proposed fee increases are not just a financial burden on CMCs but a deliberate attempt to price consumers out of justice. We must demand accountability and a return to the principles of fairness and accessibility that these bodies were founded on. If we don’t, the idea of a “free” Financial Ombudsman Service will remain nothing more than a cruel joke, and PIMFA’s supposed commitment to client interests will be exposed as little more than lip service.

The farce must end, and it’s up to us to ensure that these institutions are held to account. After all, if we don’t fight for our rights, who will? Certainly not the FOS or PIMFA—they’re too busy looking out for themselves.