FOS to resolve 60,000 motor finance cases

The Financial Ombudsman Service (FOS) calculates a quarter of the cases it expects to resolve next year will relate to motor finance commission, as it tackles a significant workload as part of what it calls “a once in a generation reform programme”.

At the launch of a consultation on its Strategic Plans and Budget, FOS said it expected to receive 188,000 new cases in 2026/27 across a range of financial products. It plans to resolve 245,000 cases, 60,000 of which will be related to motor finance commission.

The bulge in auto finance claims left FOS with a substantial backlog of cases, but according to its latest report for the quarter to the end of September, the overall number of new cases being brought has now dropped by more than a third, as professional representatives are bringing fewer cases following the introduction of a new charging model.

The data set shows that professional representatives accounted for 4,300 cases in the second quarter of this financial year, with a higher proportion of complaints now coming directly from consumers. In the same period in 2024/25, professional representatives lodged around 37,100 cases.

The figures also highlight a sharp fall in motor finance commission cases, which totalled around 2,200 complaints compared to 9,500 in the same period in 2024/25. FOS said the decrease is largely due to the FCA’s complaints handling pause as well as its plans for a redress scheme. 

FOS has been under fire over its handling of complaints, and is now working closely with the FCA and the Treasury to deliver a series of reforms to the redress system. This is intended to help firms identify and resolve issues before complaints escalate and bring consistency and predictability for businesses and consumers.

FOS has set out the plans in its strategy consultation and says it expects the majority of these changes to take place over the next two financial years.

These include increasing the case fee to £680 and compulsory levy to £86 million, while charges for professional representatives would increase from £250 to £260, with the credit if the case is found in favour of the complainant increasing from £175 to £180.

FOS has also announced it will simplify the billing process for the next financial year by replacing the free case allowance with a monetary value of £2,000 for both respondent businesses and professional representatives, as well as introducing quarterly billing in advance for the largest businesses expected to account for the most cases.

“As we consult on our Plans and Budget for 2026/27, we want to lay the foundations for an agile, responsive and modern Financial Ombudsman which is fit for the future and has the confidence of consumers and financial businesses alike. The next year will be a crucial one for our service and we welcome views from stakeholders on our proposals.”

The consultation is open until 21 January 2026.