The Financial Ombudsman Service (FOS) is to begin charging claims management companies (CMCs) and professional representatives for submitting claims from April, it confirmed today.

The change comes as it emerged that FOS CEO and Chief Ombudsman Abby Thomas has left the organisation this week after two years.

The FOS says it will charge professional representatives £250 to refer a case to its service from 1 April (after 10 free cases).

Professional representatives will receive £175 back if the case outcome is in favour of their client.

The service will remain free for consumers and for charities, families and friends who may be helping them.

The FOS said that professional representatives were behind 47% of the cases sent to the Financial Ombudsman Service between April and December 2024.

The FOS said charging CMCs and professional representatives would make its funding arrangements fairer.

From April professional representatives will be able to bring 10 cases to the service for free each financial year. After 10 cases, every subsequent case they refer will be chargeable at £250 per case. They will receive £175 back in credit if the complaint is found in favour of the consumer they represent, reducing the charge they pay to £75.

The Financial Ombudsman deals with complaints from consumers about regulated financial services firms and expects to handle nearly 250,000 cases in the current year.

The FOS said a large proportion of complaints were from professional representatives who either charge consumers or take a percentage of any redress awarded. Currently financial services firms pay a £650 case fee for complaints against them that the Financial Ombudsman investigates, while professional representatives do not pay a case fee.

Under the new rules, if a complaint referred by a professional representative is not upheld or is withdrawn, the financial business against whom the complaint was made will pay a reduced case fee of £475, instead of £650.

James Dipple-Johnstone, interim Chief Ombudsman at the Financial Ombudsman Service, said: "We've seen more cases brought by professional representatives, but fewer of these cases leading to a better outcome for their clients.

“Currently there is little commercial incentive for representatives to ensure the complaints they bring are well-founded or have merit. As a not-for-profit service, we expend our finite resources handling thousands of withdrawn or abandoned cases, which can lead to longer wait times for other customers.

“The charges we are introducing from April will bring better balance to our fee model, helping us to resolve disputes quickly and ensuring a wider contribution towards our running costs.”