The Financial Ombudsman Service (FOS) has launched a short consultation seeking views on the interest rate that it applies to compensation awarded to consumers.
The consultation follows on from the feedback it received from stakeholders on this issue, in responses to the Call for Input on reform of the dispute resolution system that it issued jointly with the Financial Conduct Authority (FCA).
FOS will continue to work with HM Treasury and the FCA on further proposals for reform, to be brought forward in the summer.
The Financial Ombudsman has put forward several proposals in the consultation, including that the current 8% interest application be updated to the average Bank of England base rate plus 1%. It is consulting to ensure the proposed new interest rate strikes the right balance between simplicity, fairness and proportionality. FOS is also suggesting that any new rate apply to new complaints submitted to the Financial Ombudsman from the date that the new rate is implemented.
The consultation will be open until 2 July. If you would like to feed into the BVRLA response, email [email protected].
Consultation - interest on compensation awards on the Financial Ombudsman website.
More information on the Financial Ombudsman website: Consultation on compensation interest levels launched by the Financial Ombudsman Service.
