The Ombudsman has said it will charge £250 for CMCs to lodge a case, reduced to £75 if the case outcome is in favour of the customer.

The service will remain free for those who bring their case directly to the service, as well as charities and voluntary organisations.

Under the proposed model, financial services firms and professional representatives will be allowed three free cases a year, beyond that they will be charged the £250 fee – reduced to £75 if the consumer’s complaint is upheld.

Under the proposals the Financial Ombudsman Service will not benefit either way from decisions.

If the FOS does not uphold the complaint, the higher fee collected will be used to reduce the fee for the financial business against whom the complaint was initially raised.

Businesses responding to a FOS complaint currently pay £650 per case.

James Dipple-Johnstone, deputy chief ombudsman at the Financial Ombudsman Service, said the proposed system would see a fairer allocation of costs.

He said: “Professional representatives can play an important role in resolving financial disputes. However, they gain financially from our service without contributing to the running costs and with little incentive to ensure that claims they advance have merit. 

“The new proposed charges are important to ensure we cover the costs associated with helping resolve disputes and we feel reflect a fairer allocation of those costs.”

Over the past two years, 20% of cases referred to the Ombudsman have been brought by professional representatives such as CMCs. Of these cases, fewer than 25% resulted in a different outcome for the complainant than they have already been offered by the responding firm.

Consumers bringing their case without representation achieved greater success, with around 32% achieving a better outcome.

The government has already begun the process of exercising powers it was given under the Financial Services and Markets Act 2023 to allow the Ombudsman to update its current fee-charging framework. The consultation is open until 4 July.