FOS is consulting on a longer-term or permanent way to incentivise businesses to settle complaints pro-actively before FOS issues its opinion. The consultation follows an initiative FOS launched for a short time in late 2021.
The change relates to how FOS publishes “uphold rate” data. In principle, FOS categorises complaints as either having had a “change in outcome” (if FOS resolves the complaint with a more favourable outcome for the complainant than when it was referred to FOS – otherwise known as “upheld”), or “no change in outcome” (if FOS finds the business either did nothing wrong, or that the business proposed a fair outcome before FOS became involved). The “uphold rate” reflects the percentage of complaints with changed outcomes.
FOS often engages with businesses to try to resolve complaints without formal investigation, but resolving cases in this way will increase the uphold rates. So, in November 2021, FOS made a temporary amendment to create a third category of outcome – “proactively settled” – for cases where a firm has offered to settle a complaint before FOS issues its initial opinion, FOS considers that offer fair, and the complainant either accepts it or FOS determines on full investigation that the offer was fair. During the 5 month pilot, around 100 firms made nearly 7,000 offers to resolve complaints in this way, and many firms have asked FOS to look to make this a permanent solution. FOS is proposing to now create a “proactively settled” outcome where complaints are resolved by fair and reasonable offer by the firm in the 14 days after FOS requests the complaints file, and these complaints would not contribute to the “uphold rate”. FOS is proposing to make this amendment for the next financial year, and then assess whether to carry it forward for following years.
FOS asks for comments by 20 March, and will publish its response by 3 April.