With immediate effect from Monday 1 April 2019, new FCA rules have more than doubled the maximum amount which the Financial Ombudsman Service (FOS) can award against regulated businesses from £150,000 to £350,000 per complaint.

There is also a small increase to £160,000 for complaints about acts or omissions by firms which took place before 1 April 2019, and which are referred to FOS on or after 1 April 2019.

The new rules will also ensure that, from 1 April 2020 onwards, both award limits are automatically adjusted each year in line with inflation, as measured by the Consumer Prices Index (CPI).

For any complaints referred to FOS before 1 April 2019, the limit will remain at £150,000.

Also with immediate effect, the FCA has significantly enhanced the number of eligible complainants, in addition to micro-enterprises, individual investors and consumers, and certain SMEs, by:

  • relaxing the eligibility criteria for SMEs so that they only have to meet the annual turnover test of under £6.5m and one of either the headcount (fewer than 50 employees) or balance sheet total (£5m) tests, rather than all three; and
  • extending the eligibility criteria to charities, trusts and personal guarantors of loans to a business.

The FCA estimates that the relaxation for SMEs will mean that around 210,000 additional SMEs will have access to FOS.