What the Financial Ombudsman Service does
The Financial Ombudsman Service is an independent UK scheme for resolving complaints between consumers and financial businesses. It is not the Financial Conduct Authority, a court, a debt adviser or a lender. It can look at complaints about products and services such as instalment loans, credit cards, overdrafts, mortgages and insurance when the business is within its jurisdiction.
The service is free to consumers. If it upholds a complaint, it can require the business to put things right. Remedies may include an apology, correcting records, refunding interest or charges, or paying compensation for distress or inconvenience. It does not usually rewrite a loan agreement or declare a debt unenforceable, though it can consider whether a lender treated you fairly under the relevant rules.
The business gets the first chance to resolve the issue. The ombudsman steps in only after that opportunity, or after the allowed response period has passed. The FCA complaint-handling rules require firms to investigate complaints fairly and promptly.
When you can take a loan complaint to the ombudsman
You can generally escalate a complaint to the ombudsman if the business is regulated by the Financial Conduct Authority, or was regulated when the problem happened, and your complaint falls within the scheme's rules. The business must also have had a chance to respond. If it sends a final response, the ombudsman can normally consider the complaint. If it does not send a final response within the allowed period, you may be able to escalate anyway.
Time limits matter. The ombudsman usually expects you to complain within six months of the business's final response. It also generally cannot look at events that happened more than six years ago, unless you only discovered the problem later, in which case the limit may be three years from when you should reasonably have known. These rules are explained by the ombudsman's how-to-complain guidance.
Some complaints fall outside the scheme. Examples can include complaints about a business that is not regulated for the activity, complaints that are already being dealt with by a court, or matters that the ombudsman has no power to decide. If you are unsure, check the ombudsman's rules and ask it before spending time on a full submission.
Before you escalate: build a clear complaint file
A strong complaint is factual and easy to follow. Write a short timeline: when you took out the loan, what you were told, what changed, when you contacted the lender, and what response you received. Keep it chronological. Avoid emotional language where a clear statement of facts will do more.
Collect documents you already have, such as the credit agreement, statements, arrears notices, default notices, emails, web chat transcripts and the lender's final response. If you are checking whether the lender recorded information correctly, see our guide to checking your credit file.
Decide what outcome you are asking for. That might be a correction, a refund, a payment arrangement, or an explanation. Be realistic: the ombudsman looks at whether the business acted fairly and in line with the rules. It does not simply take your side or the lender's side. If your complaint involves missed payments or arrears, our guide to what happens if you miss a payment explains the wider consequences.
How to escalate: step by step
If the lender has given its final response or has not resolved your complaint within the allowed period, you can take the matter to the ombudsman. The exact process may vary, but the usual sequence is:
- Check the time limit. Confirm that you are within the ombudsman's time limits and that the business is covered.
- Gather your evidence. Put your timeline, documents and requested outcome into one file, ideally as a PDF or clear set of attachments.
- Use the ombudsman's official route. Start through the Financial Ombudsman Service complaint page or another method it lists. Do not use a paid claims company that pretends to be the ombudsman.
- Explain the complaint clearly. Say what the lender did, why you think that was unfair or wrong, and what you want to happen.
- Respond to requests. The ombudsman may ask for more information or ask the lender for its file. Reply within any deadline you are given.
- Consider the outcome. If the ombudsman makes a decision, read it carefully. If you accept it, the business is usually bound by it. If you reject it, you can consider other options, including court, though that is a separate process.
Keep copies of everything you send. If you post documents, keep a record of the date and any tracking details. If you use an online form, save the confirmation. This is not about distrust; it is simply good administration.
What happens while the ombudsman investigates
The ombudsman is not a courtroom and you do not usually need a lawyer. It will review the evidence from both sides, may ask questions, and may try to settle the complaint informally. Many complaints are resolved before a formal decision. If a formal decision is needed, the ombudsman explains its reasoning and what remedy, if any, is appropriate.
The business must cooperate with the ombudsman, but the process can take time. You should keep paying any loan or debt that is still due unless the lender agrees otherwise or a debt adviser helps you set up a different arrangement. Stopping payments can lead to arrears, default notices and credit file damage, even while a complaint is being investigated.
If your complaint is about affordability, the ombudsman may look at what the lender knew about your income, spending and existing debts at the time. The FCA's Consumer Credit sourcebook and the FCA's consumer credit rules set expectations for lenders. Our guide to FCA regulation and your rights explains how those rules fit together.
Common loan complaints and the evidence that helps
Different complaints need different evidence. The table below gives general examples, not legal advice.
| Complaint type | What to explain | Useful evidence |
|---|---|---|
| Unaffordable lending | You could not afford repayments without borrowing more or missing essentials, and the lender did not properly assess affordability. | Bank statements, income evidence, existing credit commitments, lender's affordability checks, correspondence. |
| Misleading information | The lender or broker said something about cost, repayment or consequences that was inaccurate or incomplete. | Call notes, emails, web chat logs, screenshots, written quotes, agreement terms. |
| Unfair charges or interest | You believe fees or interest were applied unfairly or not explained properly. | Statements, fee notices, agreement, arrears history, complaint correspondence. |
| Incorrect default or credit reporting | A default or missed payment was recorded when it should not have been, or the balance is wrong. | Credit reports, lender statements, payment records, notices, dispute letters. |
| Poor handling of arrears or vulnerability | The lender did not treat you fairly when you told it about hardship, illness or other vulnerability. | Medical or benefit evidence if relevant, call logs, emails, debt advice records. |
Under the Consumer Credit Act 1974, the court can consider whether a credit relationship is unfair under section 140A, and the ombudsman can consider fairness in its own process. The ombudsman's published ombudsman decisions can help you understand how similar issues are assessed, although each case turns on its facts.
If the ombudsman cannot help or you disagree
If the ombudsman decides it cannot consider your complaint, it should explain why. That may be because the business is outside its jurisdiction, the time limit has passed, or another forum is more appropriate. You may still have options, including complaining to the Financial Conduct Authority about the firm's conduct, using the courts, or seeking free debt advice.
Free and impartial debt advice is available from organisations such as StepChange, National Debtline and Citizens Advice. The government also provides options for dealing with your debts. If you are worried about a scam that claims to fix your complaint for a fee, read our guide to spotting a loan scam. You can also check a firm on the FCA register.
A complaint to the ombudsman is not a substitute for keeping up with payments you can afford, and it is not a way to erase a legitimate debt. It is a dispute-resolution process. Used properly, it can produce a fair outcome, correct errors and hold a lender to the standards set by the FCA and consumer credit law.