Complaints to the banking ombudsman have tumbled in the three months to September 2025 after the Treasury launched its own clamp down.
The Financial Ombudsman Service (FOS) recorded 46,300 complaints in the quarter, down from 73,700 in the same period last year.
In the three months to June, 68,000 complaints were recorded.
The fall followed the FOS introducing charges for professional representatives who referred cases.
Consumers lodged 305,726 complaints with the FOS in the year ending March 31 2025, closing in on record highs during the PPI scandal.
This was triggered by a surge in motor finance grievances – the car mis-selling scandal which headed to the Supreme Court in April – brought forward by professional representatives.
But, under the new system, firms will be charged £250 for each case referred to the FOS beyond the first ten cases per financial year.
The changes, which came into effect in April 2025, also dictate that banks will not be charged for the first three complaints they receive in the financial year. From the fourth complaint onward, a case fee of £650 applies.
Earlier this year, City AM revealed the banking industry’s ‘Big Six’ – Barclays, HSBC, Lloyds Banking Group, Natwest, Santander and Nationwide – paid the FOS a combined £38.8m in admin fees for the year ending March 31.
Lloyds topped the list at £12.6m, with Barclays second at just short of £9m.
Ombudsman in leadership crisis
The latest quarterly data batch showed professional representatives accounted for 4,300 cases. In the same period, 12 months prior, these firms had lodged just over 37,000 complaints.
Motor finance cases specifically fell to 2,200 from 9,500 over the year; however, this was thanks to the Financial Conduct Authority (FCA) hitting pause on complaints handling as it plans the industry-wide redress scheme.
The FOS has been rocked by a leadership crisis in the last year following the abrupt departure of chief executive Abby Thomas in February.
A Treasury Committee report, published in July, revealed Thomas had been dismissed after a “mutual collapse in confidence” stemming from “fundamental disagreements” with the board over strategy.
Just days later, Baroness Zahida Manzoor, chair of the FOS, announced she would step down at the end of her term on August 1.
Chancellor Rachel Reeves has laid out plans for “the most significant reform to the Financial Ombudsman Service since its inception.”
This followed accusations of the body becoming a “quasi-regulator” with new reforms indicating it must seek the FCA’s view for guidance on unclear matters.
The Financial Conduct Authority named James Dipple-Johnstone the new interim chair of the Financial Ombudsman Service after its initial recruitment campaign “proved unsuccessful” in July.
Dipple-Jonstone said: “The changes we have already introduced – and those we plan to make in the future – will allow us to focus on getting back to our core purpose for customers as a quick, informal and impartial alternative to the courts for resolving disputes.”