Explainer, UK, Ireland, Canada, Ombudsman schemes, Complaints
How an ombudsman scheme administers a complaint
The scheme rules, and the statute behind them, decide who gets in, how a complaint is judged, what the decision binds and what it costs.
Published Last reviewed 4 min readBy SpyroLex
An ombudsman or complaint scheme administers a case under its own rules and the statute behind them: the firm answers first, the consumer refers within a time limit, the scheme decides on a set standard, and the decision binds once accepted. Running it well is running many alike complaints the same way, on the record.
What a complaint scheme administers
An ombudsman or complaint scheme is an out-of-court route that decides complaints a consumer brings against a firm, on what is fair, and can order redress; it is usually free to the consumer. Its scheme rules, and the statute behind them, fix how a complaint enters, how it is decided and how the decision binds. For the UK Financial Ombudsman Service that statute is the Financial Services and Markets Act 2000, Part XVI. Administering the scheme is the work of running complaints under those rules, the same way each time.12
The volumes are large and the complaints are mostly small and alike: the UK scheme received 305,900 new cases in 2024/25. A scheme is built to decide complaints cheaply and consistently rather than one at a time in court, which is why its rules, not a workflow built per complaint, carry the load.6
The rules decide who gets in: the firm first, then a time limit
Two gates come before any investigation. First the complaint goes to the firm, which has a set time to send a final response: in the UK, 8 weeks, or 15 days for payment-services, e-money and fraud complaints. Then the consumer has a window to refer the complaint onward: in the UK, 6 months from the final response, and generally 6 years from the event or 3 years from when the consumer knew. Miss the window and the scheme may not be able to look at the complaint. These are rulebook deadlines, applied the same way to every case.3
The decision standard, and who it binds
The scheme decides on a standard its rules set. The UK ombudsman decides what is “fair and reasonable in all the circumstances of the case” (FSMA section 228(2)) and can direct the firm to pay redress or take other action to put things right. Once the complainant tells the ombudsman they accept the decision, it is “binding on the respondent and the complainant and final” (section 228(5)); refuse it and the consumer keeps the right to go to court.1
The redress itself is capped by rule, not negotiated case by case. UK awards are capped at £455,000 for acts on or after 1 April 2019, and £205,000 for earlier acts, for complaints referred on or after 1 April 2026. The cap, like the deadlines, is a property of the rulebook.4
How it is funded
The scheme is free to the consumer and funded by the firms. UK schemes charge a levy and a per-case fee: up to £680 per case for 2026/27, with a £2,000 case fee allowance each financial year; a professional representative who brings a case pays up to £260, reduced to £80 where the outcome changes in the consumer’s favour. The fee is set by rule and computed the same way for everyone.25
| Stage | What the scheme rules fix |
|---|---|
| Firm’s final response | The firm answers first, within 8 weeks (15 days for payments, e-money and fraud) |
| Referral window | The consumer refers within 6 months of the final response, inside the long-stop limits |
| Decision standard | Fair and reasonable in all the circumstances (FSMA s.228(2)) |
| Binding effect | Binds the firm and the consumer once the consumer accepts (s.228(5)) |
| Redress cap | £455,000 or £205,000 by the date of the act, for referrals from 1 April 2026 |
| Funding | Free to the consumer; a per-case fee and levy on the firms |
A complaint scheme is a rulebook with a caseload. The scale is the reason the rules, not a process built per complaint, have to carry it.
The same model, different settings
The shape travels; the settings differ, and a scheme’s own rules set which applies. Ireland’s Financial Services and Pensions Ombudsman issues legally binding decisions. Canada’s OBSI makes non-binding recommendations and must publish a firm’s refusal to pay, up to a CAD $350,000 recommendation. Binding on acceptance, binding outright, or a published recommendation: the administration is the same work either way, eligibility, investigation and a decision on the record, under one set of rules.7891011
Why this is an administration problem, not a casework one
Because the complaints are many and alike, both the cost and the fairness of a scheme come from running every case the same way: the same eligibility gates, the same decision standard, the same record. The rulebook is what makes that repeatable, and the record of what the rules required and what the decision-maker found is what a firm, a regulator or a court can later read. It is the same pattern set out in administering a case on your own rulebook, applied to complaints at volume; the financial schemes themselves are mapped in financial ombudsman schemes.6