FOS in 2025: key complaints trends in the financial sector

The Financial Ombudsman Service (FOS) periodically publishes statistics on complaints it has received about financial services and products provided by UK regulated firms. In a year of high publicity and potential mass redress events in the UK financial services sector, FOS' most recent updates show some interesting trends in complaint topic, frequency, method and outcome.

This article (first published in Law360) explores key developments in 2025 across the financial sector and how these have impacted complaints referred to FOS over the last year.

Changes within FOS

The complaints statistics discussed below do not exist in a bubble and there are external factors that explain some of what might otherwise look to be surprising trends. 2025 has seen some huge changes in FOS fee models, the motor finance sector, and the UK's overall approach to customer complaints and redress.

Since 1 April 2025, the FOS fee framework has been charging claims management companies (CMCs) and similar professional representatives £250 for each case they refer to it (only the first 10 in each financial year being free), with £175 to be received back in credit if a case outcome is in favour of the consumer. The change was driven mainly by the large numbers of claims generated by professional representatives which were often lacking in detail and without any realistic prospect of success, yet which took significant FOS resource to deal with.

The new fee aims to make funding arrangements fairer, and encourage CMCs to submit better-evidenced complaints and consider their merits diligently before referring to the FOS. The Financial Conduct Authority (FCA) has also written directly to CMCs involved particularly in motor finance commission claims setting out its expectations of their behaviour, and separately to warn them that any related financial promotions must be Consumer Duty compliant.

Complaints about commissions on motor finance started gaining traction some years ago and the issue has attracted increasing attention from regulators, the FOS, the courts and CMCs alike. It came to a head on 1 August 2025, when the Supreme Court delivered its hotly anticipated decision in the Hopcraft & Others cases on whether motor finance lenders are liable to compensate consumers for hidden commissions ^[1].

This decision – which contradicted the November 2024 Court of Appeal decision in which the lenders in all three of the cases heard together were deemed to be acting as fiduciaries for their customers and to be liable to repay commission – sought to ensure that consumers who had been treated unfairly would be compensated, while disagreeing with the Court of Appeal on the fiduciary duty point.

The decision came after swathes of consumer complaints had already been filed, and lenders were reported to have ringfenced millions to prepare for any mass redress event. So, although all complaints remain on pause while the FCA consults on a potential redress scheme - and, if the scheme is implemented, many consumers' claims will not reach the FOS - there are nevertheless a number of related disputes (including from consumers outside the scheme who think they should be within in) that the FOS will have to look forward to next year.

The FCA's consultation on its motor finance redress scheme ^[2] – the deadline for which has been extended to 12 December 2025 – sits against a backdrop of a wider Government, FCA and FOS effort to modernise the UK redress system ^[3]. The joint consultation on the redress system and role of the FOS closed on 8 October 2025, and proposed a number of reforms designed to prevent FOS acting as a quasi-regulator, including:

• Giving the FCA more flexibility to manage mass redress events
• Implementing a formal mechanism for FOS to refer issues to the FCA for interpretation of Handbook rules
• Creating a registration stage to ensure only complete and eligible complaints progress, and
• Lowering the applicable interest rate on compensation awards from 8% to the Bank of England base rate +1%.

If confirmed, these changes will require significant resource to implement.

Key complaints trends in 2025

FOS publishes statistics on complaints on a quarterly, half-yearly, and annual , and the figures from the last year or so help to illustrate the impact of the developments outlined .

The statistics from Q3 2024/25 – covering October to December 2024, and notably, the point at which the Court of Appeal indicated that motor finance lenders could have considerable liability for commission-related claims – reported a huge 40% rise in complaints against the same period the previous year, with more than 68,000 complaints lodged.

The most complained about product was motor hire purchase (unsurprisingly, in light of the focus on motor finance commission), although retail banking and credit card complaints also remained high, with three quarters of the credit card complaints relating to perceived unaffordable and / or irresponsible lending. FOS upheld around 34% of complaints brought directly by consumers, which was largely consistent with previous periods, significantly more than the 26% uphold rate for cases issued by professional representatives. ^[4]

Similarly, the half-year statistics covering July – December 2024 highlighted a 50% rise in complaints compared to the same period for 2023, with approximately 141,000 complaints, again mostly attributable to banking and credit products, including those related to motor vehicle finance commission. The period saw the proportion of cases submitted by professional representatives more than double – 46% compared to 22% in H2 2023. ^[5]

The annual statistics for 2024/25 reported over 305,000 complaints submitted, a 54% increase on 2023/24, and the highest yearly total of complaints since the payment protection insurance (or PPI) scandal of 2018/19. The total figure comprised significant increases in complaints across all main issue and product areas, but particularly for motor vehicle finance commission, fraud and scams and credit cards, which saw their highest ever recorded complaints level. Overall, FOS noted the substantial pressure this was putting on the UK's redress system. ^[6]

These figures changed quite drastically in Q1 2025/26 – covering April – June 2025. With the FCA's pause on the need for firms to respond to motor finance commission complaints taking effect in January, and the introduction of fees for professional representative referrals on 1 April, FOS saw a 50% reduction in complaints about perceived unaffordable and irresponsible lending.

The most complained about topic remained motor hire purchase, but across all financial products, complaints numbers about motor finance commission dropped from around 36,000 in Q4 2024/25 to 21,500 in Q1 2025/26.

Similarly complaints about fraud and scams, around 50% of which related to authorised push payment (APP) fraud, dropped from around 8,800 to 6,800 over the same period. The adjustments to the fee framework for CMCs had a clear impact in this period – with around 30,800 complaints brought by professional representatives against around 36,600 in the previous quarter – and FOS anticipated a considerable further drop in Q2. ^[7]

The FOS' prediction was proved right, because in Q2 2025/26, new complaints to FOS fell by around one third. Of around 46,300 complaints in total, only 4,300 were referred from professional representatives, compared to over 37,000 of 73,000 complaints brought in the same period last year.

Notably, their complaints were also more likely to be upheld, with FOS pointing to likely improvements (under its new fee model) in professional representatives' due diligence and preparatory work prior to referring complaints. ^[8] Previously, it had experienced high numbers of withdrawn or abandoned complaints from professional representatives, who, before the new charging structure, had no real incentive to carry out significant due diligence or take care to provide evidence to back up complaints before submitting them.

It is no coincidence then, that the figures for both irresponsible/unaffordable lending and motor finance commission fell by 80% - in the former case most likely due almost entirely to the professional representative charging structure and in the latter because of both the FCA-induced pause and the redress scheme consultation.

What all this meant was that current accounts returned to being the most complained about product, although levels of complaint have remained broadly consistent.

What next?

In terms of 2026, it seems likely that the cases brought by professional representatives will stabilise at the new lower levels, and that they will be particularly wary of bringing claims relation to motor finance commissions even when the pause is lifted.

So while we can probably expect to see motor finance related complaints rise again, possibly in the latter part of 2026, relating to matters that are either outside the FCA's scheme or where complainants feel their lenders did not follow the scheme rules, we might otherwise reasonably expect to see credit and current account related complaints to return to the top spots.

Although fraud remains a big concern, the Payment Systems Regulator has been pleased with indications that the APP Reimbursement Requirement introduced in October 2024 has seen both good levels of reimbursement paid to victims and consumer trust in their banks increase.

It is also worth noting that in recent reporting, complaints about e-money have entered into the top five most complained about areas, with these filings making up 2,200 of Q2 2025/26's 46,300 new complaints, up from 1,700 in Q1.

This placed e-money as the 5th most complained about product, against 7,900 complaints about current accounts, which was the most complained about. This pattern might indicate a future increase in complaints about innovative products as the products become more readily available to, and more frequently used by, consumers.

This may be particularly true if the FCA decides to allow crypto customers to refer complaints to the FOS once crypto-asset activities are brought within the regulatory perimeter in the coming years. The FCA's call for views on this point closed on 15 October, so we can expect to understand more about where these product types will fall in the UK's redress system soon. ^[9]

Sources

[1]Hopcraft and another (Respondents) v Close Brothers Limited (Appellant) - UK Supreme Court UKSC/2024/0157.

[2] https://www.fca.org.uk/publications/consultation-papers/cp25-27-motor-finance-consumer-redress-scheme.

[3]FS Sector Strategy: Review of the Financial Ombudsman Service - GOV.UK: https://www.gov.uk/government/consultations/fs-sector-strategy-review-of-the-financial-ombudsman-service

[4]Financial Ombudsman Service receives 40% more cases when compared to the same time last year – Financial Ombudsman service: https://www.financial-ombudsman.org.uk/news/financial-ombudsman-service-receives-40-cases-compared-time-last-year.

[5]Half-yearly complaints data: H2 2024 – Financial Ombudsman service: https://www.financial-ombudsman.org.uk/data-insight/our-insight/half-yearly-complaints-data-h2-2024.

[6]Financial Ombudsman Service receives over 305,000 complaints in 2024/25 – Financial Ombudsman service

[7]Financial Ombudsman Service sees a fall in case levels – with complaints at their lowest level for more than a year – Financial Ombudsman servicehttps://www.financial-ombudsman.org.uk/news/financial-ombudsman-service-sees-fall-case-levels-complaints-lowest-level-year

[8]Financial Ombudsman Service continues to see a fall in cases – Financial Ombudsman service: https://www.financial-ombudsman.org.uk/news/financial-ombudsman-service-continues-see-fall-cases.

[9]CP25/25: Application of FCA Handbook for Regulated Cryptoasset Activities | FCA: https://www.fca.org.uk/publications/consultation-papers/cp25-25-application-handbook-regulated-cryptoasset-activities