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FSA warning to IFAs trying to recoup complaint fees

The FSA says it will take action against IFAs if they try to dissuade consumers from pursuing claims.

The Financial Ombudsman Service has seen increasing numbers of cases where IFAs have been telling consumers that if they take their complaint to the FOS they will have to pay the IFA&#39s fees if they lose.

The FSA says it has written to firms telling them it considers it unfair for a firm to try and recoup its case fee from an uns-uccessful consumer complaint and it will take action against firms which try to do this.

The regulator points out that if the FOS finds a claim brought by a consumer to be frivolous or vexatious, the IFA would not have to pay a case fee.

There is no case fee for the first two cases brought against an IFA in any year but the third case costs £360. Figures from the FOS show that of the 4,000 complaints received last year, only 124 firms appeared in front of the ombudsman more than twice.

FOS spokeswoman Iris Baker says: “Some IFAs tell consumers that if they take their case to the FOS and lose, they will have to pay the IFA&#39s case fee. We are totally against this – the whole basis of the FOS scheme is that it is free to consumers. We would deter any IFA from doing this and would let the FSA know about it.”

FSA spokeswoman Jackie Blyth says: “We would consider it unfair for any firm to charge for a complaint. If anyone comes across a firm writing to consumers asking for its case fee back, they should let us know as this is not treating customers fairly.”


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