How is the Financial Ombudsman Service (FOS) funded?

The Financial Ombudsman Service (FOS) is funded primarily through a general levy paid by all regulated financial firms. This funding mechanism ensures that all firms contribute to the cost of the service, which in turn allows the FOS to operate independently and effectively. The general levy is based on the number of complaints received and the size of the firm, which creates a fair distribution of costs among industry participants.

This structure means that customers do not have to pay fees directly for complaints they submit, making the service accessible to all consumers. The reliance on a levy rather than on alternative funding sources helps maintain neutrality and independence in resolving disputes between consumers and financial service providers. Other options, like customer fees or donations, do not reflect the operational model of the FOS, as these could create biases or limitations in service accessibility.