FSMA 2000 s.404B – Complaints to the ombudsman scheme

(1)If—

(a)a consumer makes a complaint under the ombudsman scheme in respect of an act or omission of a relevant firm, and

(b)at the time the complaint is made, the subject-matter of the complaint falls to be dealt with (or has been dealt with) under a consumer redress scheme,

the way in which the complaint is to be determined by the ombudsman is to be as mentioned in subsection (4).

[^F3162 (1A)Subsection (1) does not apply if the consumer and the relevant firm agree that it should not apply.^F3162]

(2)If a consumer—

(a)is not satisfied with a determination made by a relevant firm under a consumer redress scheme, or

(b)considers that a relevant firm has failed to make a determination in accordance with a consumer redress scheme,

the consumer may, in respect of that determination or failure, make a complaint under the ombudsman scheme.

[^F3163 (2A)The way in which a complaint mentioned in subsection (2) is to be determined by the ombudsman is to be as mentioned in subsection (4).

(2B)Subsection (2A) does not apply if the consumer and the relevant firm agree that it should not apply.^F3163]

[^F3164 (3) In the following provisions of this section “relevant complaint” means—

(a)a complaint mentioned in subsection (1) other than one in relation to which subsection (1A) applies, or

(b)a complaint mentioned in subsection (2) other than one in relation to which subsection (2B) applies.^F3164]

(4)A relevant complaint is to be determined by reference to what, in the opinion of the ombudsman, the determination under the consumer redress scheme should be or should have been (subject to subsection (5)).

(5) If, in determining a relevant complaint, the ombudsman determines that the firm should make (or should have made) a payment of an amount to the consumer, the amount awarded by the ombudsman (a “money award”) must not exceed the monetary limit (within the meaning of section 229).

(6)But the ombudsman may recommend that the firm pay a larger amount.

(7)A money award—

(a)may specify the date by which the amount awarded is to be paid;

(b)may provide for interest to be payable, at a rate specified in the award, on any amount which is not paid by that date; and

(c)is enforceable by the consumer in accordance with Part 3 or 3A of Schedule 17 (as the case may be).

(8)If, in determining a relevant complaint, the ombudsman determines that the firm should take (or should have taken) particular action in relation to the consumer, the ombudsman may direct the firm to take that action.

(9)Compliance with a direction under subsection (8) is enforceable, on the application of the consumer, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(10)In consequence of the provision made by this section, sections 228(2) and 229 do not apply in relation to relevant complaints; but all other provision made by or under Part 16 applies in relation to those complaints.

(11)The compulsory jurisdiction of the ombudsman scheme is to include the jurisdiction resulting from this section.

(12)Nothing in subsection (1) is to be taken as requiring the ombudsman to determine a complaint in any case where (apart from that subsection) the complaint would not fall to be determined (whether as a result of rules made under Schedule 17 or otherwise).

(13)Nothing in subsection (2) is to be taken as conferring an entitlement on a person who, for the purposes of the ombudsman scheme, is not an eligible complainant in relation to the subject-matter of the determination mentioned there.

Read section 404B in the full Act → Definitions (6) Cases (3)

Definitions used in section 404B

consumers

(1) For the purposes of sections 404 to 404B “consumers” means persons who —

(a) who have used, or may have contemplated using, any of the services within subsection (2); or

(b) who have relevant rights or interests in relation to any of the services within that subsection ; or

(c)in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.

Defined in s.404E(1) · see it in the full Act

the ombudsman scheme

(3) The scheme is to be operated under a name chosen by the scheme operator but is referred to in this Act as “the ombudsman scheme”.

Defined in s.225(3) · see it in the full Act

“the ombudsman scheme” has the meaning given in section 225(3);

Defined in s.417(1) · see it in the full Act

redress

“redress” includes—

(a)

interest; and

(b)

a remedy or relief which could not be awarded in legal proceedings;

Defined in s.404F(1) · see it in the full Act

specified

“specified” means specified in rules made under section 404.

Defined in s.404F(1) · see it in the full Act

(5) “Specified” means specified in an order made by the Treasury.

Defined in s.22(5) · see it in the full Act

rule

“rule” means a rule made by the FCA or the PRA under this Act;

Defined in s.417(1) · see it in the full Act

eligible complainants

(5) The reference in sub-paragraph (4) to “eligible complainants” is a reference to complainants who are eligible in relation to the compulsory or voluntary jurisdiction of the ombudsman scheme (see section 226(6) and 227(7)).

Defined in Sch.17 para.15(5) · see it in the full Act

Cases considering section 404B (3)

Mazarona Properties Ltd v Financial Ombudsman Service

[2017] EWHC 1135 (Admin) · 26 April 2017Limits

The judgment recognised section 404B as conferring an express power to determine complaints about how a complaint was handled under a consumer redress scheme. It had no direct application because the AIB scheme was not such a scheme. (see para [23])

British Bankers Association, R (on the application of) v The Financial Services Authority & Anor

[2011] EWHC 999 (Admin) · 20 April 2011Limits

The Ombudsman must determine a complaint within a consumer redress scheme by reference to what the scheme requires. The court treated this as a specific limitation for relevant complaints, not a general limitation on the Principles (see paras [69]; [83]-[86]).

Bluecrest Capital Management (UK) LLP v The Financial Conduct Authority

[2023] UKUT 140 (TCC) · 21 June 2023

Cited in explaining the statutory treatment of complaints falling within a consumer redress scheme. (see paras [224]; [244]-[245])

What each judgment says about section 404B is in the case-law panel in the full Act.

Amendments and notes

3 notes from legislation.gov.uk

Amendments

F3162S. 404B(1A) inserted (7.4.2015) by The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (S.I. 2015/542), reg. 1(2), Sch. 7 para. 1(2)(a) (with reg. 7)
F3163S. 404B(2A)(2B) inserted (7.4.2015) by The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (S.I. 2015/542), reg. 1(2), Sch. 7 para. 1(2)(b) (with reg. 7)
F3164S. 404B(3) substituted (7.4.2015) by The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (S.I. 2015/542), reg. 1(2), Sch. 7 para. 1(2)(c) (with reg. 7)