The financial ombudsman service is an independent statutory body established by parliament as a financial expert to settle individual complaints between consumers and any businesses providing financial services. It is a free service used where the consumers are unable to resolve issues on their own.
The ombudsman service deals with a wide range of financial matters, mortgages, credit cards, and insurance including mis-sold PPI (payment protection insurance) cases. As the service is completely independent and impartial, it will assess claims from both sides in the event of a complaint. When it has been decided that a consumer has in fact been treated fairly, they will explain why and close the case. If the decision is made that the business has acted unfairly, the financial ombudsman has the power to seek compensation on behalf of the complainants without it going to court.
If neither party agree on the outcome (for example a consumer trying to claim PPI compensation against a bank), the issue is then passed to the courts to decide, however – independent commentators often recommend that consumers use the ombudsman service as the outcome of a court case can often be unexpected and sometimes disappointing.