FCA and Treasury prepare overhaul to improve shock of mass complaints

Unexpected mass redress schemes are being targeted by a set of proposals from the FCA to understand and respond to the causes earlier, to help firms take action sooner and to improve "operational efficiency" at the Financial Ombudsman Service and the Financial Services Compensation Scheme.

The proposals are launched at the same time as an HM Treasury consultation on similar issues, which includes a time limit for claims and an adaptation of 'the fair and reasonable' test operated by the Ombudsman. Responses are sought for the two co-ordinated consultations by 8 October. The Financial Conduct Authority intends to publish its policy statement in H1 of 2026 and the Treasury initiatives will require "changes to legislation, when Parliamentary time allows".