Latest news with #FinancialOmbudsmanService
Bloomberg
13-06-2025
- Business
- Bloomberg
Regulators Are Harming UK as a Financial Center, Lawmakers Warn
A culture of risk aversion and mission creep among UK financial regulators is undermining trust and placing costly burdens on banks and insurers, an influential group of parliamentarians found. The House of Lords Financial Services Regulation Committee said officials need the clip the wings of the Financial Ombudsman Service, whose awards for motor finance claims have been so large foreign firms fear there is a 'regulatory penalty attached to investing in the UK.'
Yahoo
09-06-2025
- Business
- Yahoo
Chase told to pay £150 to neurodivergent customer because app didn't have dark mode
A bank was ordered to pay a neurodivergent customer £150 after she complained that its app didn't have a dark mode. A Chase customer – known only as 'Mrs C' – said that the bank's app was more difficult to use because she couldn't toggle the background colour. Those with neurodivergence – a blanket term often used for conditions including autism and ADHD – sometimes prefer using dark mode as it is said to reduce distractions, making it easier for them to focus. Mrs C, who has complained about the bank before, said the lack of a dark mode option 'made her feel as though she didn't matter' in a complaint to the Financial Ombudsman Service (FOS). She also claimed she has to use the app because an undisclosed disability means she cannot speak on the phone. An online FOS ruling, which found in her favour, said: 'For a bank to not have dark mode on their app disadvantages neurodivergent customers, including herself, and makes her feel not listened to and that Chase doesn't take accessibility for their customers seriously.' Chase told the FOS that changing the app to provide a dark mode would be a 'colossal and expensive task'. It also said that Mrs C had been a customer for more than a year when she complained in March 2024, and hadn't mentioned the lack of dark mode before. Ombudsman Nicolas Atkinson wrote: 'There are certain groups of customers who've found that 'dark mode' makes websites and apps, for example, more accessible to them. That includes, for example, people who are neurodiverse.' He added: 'I can see that Chase offers this to its card merchant services customers, so it's disappointing to see it say that this would be a colossal and expensive task when it has no evidence to back this up.' Chase had offered to pay Mrs C £50 after mistakenly calling her to discuss her complaint, despite knowing that she was unable to speak on the phone. But the bank was ordered to pay an extra £100 because of the lack of dark mode although the ombudsman admitted that it was 'not an ideal solution'. Some banks already have apps with dark modes. In March this year, Lloyds introduced it on its mobile app for iPhones, and Spanish bank BBVA has a similar feature. Dark modes, which turn the background of an app to a darker black or grey colour, rather than white, can reduce eye strain and keep phone batteries running for longer. Chase, which was launched in the UK in 2021, is a digital-only bank which offers current and savings accounts. It is owned by JPMorgan, America's largest bank. A spokesman for Chase said: 'We offer a range of different accessibility options based on the needs of our customers, and in line with our commitment to create accessible and inclusive products and services for all. 'While we don't currently offer dark mode in our app, customers can make colour adjustments on their mobile phones – including colour inversion which will make the Chase app 'dark', if the device allows and the customer chooses to.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
08-06-2025
- Business
- Telegraph
Alternatives to long-term care insurance and how to pay for care
The spiralling cost of long-term care is a concern for many in Britain's ageing population, especially since it can be difficult to get state support. Long-term care insurance used to offer individuals protection to help cover these costs, but these policies no longer exist. However, there are alternatives. Here, Telegraph Money explains what your options are to help meet care costs, and how much you might expect to pay. What is long-term care insurance? Why is it no longer available? Alternatives to long-term care insurance Cost of long-term care in the UK Can the Government fund long-term care? What is long-term care insurance? Long-term care insurance is a legacy product that provides protection for later in life care costs. The policies are no longer available on the market to buy, although customers may still be receiving payouts from existing plans. Policies provided holders with a regular income to pay fees for a nursing home or for home care, according to the Financial Ombudsman Service. This could include round-the-clock care in your home or for particular services, such as help with bathing and dressing. Why is it no longer available? Part of the reason long-term care insurance came to an end was the escalating costs of care and increasing life expectancy. Combined, this made it unaffordable for policy holders. As there is no cap on the cost of care in the UK, it became too hard to develop a workable product. Under Boris Johnson, the Conservatives had planned to introduce a £86,000 cap on the amount individuals would have to pay towards their own care costs, after which the state stepped in. However, since coming to power last year Labour has announced that it will not go ahead with the previous government's plan. As a result, many individuals will have to continue contributing high amounts to their care costs. There are around 130,000 care home residents who self-fund their care, according to the Office for National Statistics. Alternatives to long-term care insurance While long-term care insurance is no longer offered in the UK, there are other options that help meet individual care needs. However, they are not comprehensive and so you need to make sure you know what is and isn't covered and how that corresponds to your needs. It is also worth checking that you don't have an old long-term care insurance policy or existing coverage through long-standing life insurance. Care fee annuity A care fee annuity, also called an immediate needs annuity, is designed to bridge the gap between your income and the cost of your care for the long term. An immediate care annuity works in a similar way to a normal annuity, where you receive a guaranteed income – but the money goes directly to your care provider rather than to you. As the payment doesn't come to you it isn't classed as income, and therefore isn't taxable. It helps avoid a situation where you are left without the funds necessary to pay for care. However, this kind of product requires you to provide a named care provider in order to access the money, which means you must either already be receiving care, or you're just about to start receiving care and know which provider you'll be using. To buy an annuity of this kind it is best to find a financial planner specialising in long-term care. You may have to complete a medical assessment for a prospective provider so they can estimate your likely needs. Your annuity rate – the amount of money you are given – will depend on a variety of factors, including your age and medical history. It is also worth looking at an option to protect against fee rises by increasing your annuity payment annually by a fixed percentage or inflation. Sarah Pennells, consumer finance specialist at Royal London, said: ' Making decisions around care, for yourself or a parent, are never easy, but thinking about how you would pay care fees, ahead of any crisis, is a sensible approach to take. 'One of the options to consider is whether an 'immediate needs annuity' is right for you. There aren't many insurers who offer this product, but it can be bought at the point that you need care. 'In exchange for you paying a lump sum to an insurance company, it could pay your care costs for as long as you live. 'Although not cheap, as they can cost tens or even hundreds of thousands of pounds, these products can be a big help if you have capital or savings you want to preserve. 'However, depending on how quickly care home fees rise, they are not guaranteed to cover care home fees in full for as long as you need them.' Critical illness cover Critical illness cover is a form of life insurance that will pay out a lump sum if you are diagnosed with an illness covered by your policy. The policy holder can then use that money for any costs, such as necessary long-term care. However, you will need to ensure that your illness is covered by the policy to get a payout, otherwise you could be left with costs that aren't covered. Conditions that are likely to be covered include strokes, Alzheimer's and cancer. Critical illness insurance doesn't just cover care later in life, but can also be taken out at a younger age to protect against illness. Some providers also offer policies designed to provide cover for children. However, there may be a maximum age that you are still eligible to take out the policy. For Aviva, for example, it is 64. Prices for critical illness cover vary based on factors such as your age, health and level of coverage, but premiums can be as cheap as £12 a month with an average of £29 a month, according to comparison site MoneySupermarket.
Finextra
07-06-2025
- Business
- Finextra
Preparing for BNPL regulation: What firms need to do now: By Ben O'Brien
The arrival of formal regulation for Buy Now, Pay Later (BNPL) products is no longer a question of if, but when. With the Treasury's May 2025 consultation response, the direction is this: by mid-2026, third-party BNPL lenders will fall within the scope of the Financial Conduct Authority (FCA). This change brings with it a full set of regulatory requirements—covering affordability, creditworthiness, redress, disclosures, and governance. While many firms are familiar with the general framework, the pace and detail of implementation demand serious attention. Risk leaders now face a critical window to build a strategy that aligns commercial goals with regulatory readiness. Scope of the new BNPL regime From mid-2026, third-party BNPL providers must be authorised by the FCA and comply with its rules on affordability, creditworthiness, consumer duty, complaints, disclosures, and more: Mandatory, proportionate affordability and creditworthiness checks Firms must demonstrate verifiable checks at the point of decisioning, aligned to individual circumstances, not just product type. Firms must demonstrate verifiable checks at the point of decisioning, aligned to individual circumstances, not just product type. Access to the Financial Ombudsman Service (FOS) BNPL customers can now escalate complaints to FOS, increasing the importance of auditable redress processes and timely resolution. BNPL customers can now escalate complaints to FOS, increasing the importance of auditable redress processes and timely resolution. Tailored disclosure requirements for digital-first products The FCA will introduce a bespoke regime focused on real-world comprehension — not just information delivery. Firms will need to test and evidence understanding. The FCA will introduce a bespoke regime focused on real-world comprehension — not just information delivery. Firms will need to test and evidence understanding. Extension of Section 75 protections to BNPL agreements Providers will be jointly liable for qualifying claims, requiring clear merchant oversight, governance controls, and capital planning to manage new exposure. While third-party BNPL is the initial focus, merchant-offered BNPL products remain outside the perimeter for now. This exemption, based on Article 60F(2) of the Regulated Activities Order, is under review and could be revisited if scale or harm increases. What this means for compliance and risk leaders The FCA isn't looking for surface-level compliance. It expects firms to demonstrate that processes are working and that consumers are genuinely protected. Affordability frameworks must evolve Checks must be proportionate and verifiable, with models recalibrated to reflect customer circumstances. Even low-value lending must evidence the potential for harm reduction. Complaint handling will need to be FOS-ready This includes robust audit trails, clear redress pathways, MI reporting on themes, and training on FOS processes. Joint liability introduces new exposure Providers must enhance governance around merchant partnerships, define liability clearly in contracts, and plan for potential claims in their capital models. Joined-up governance is essential Effective programmes will require close collaboration across credit, compliance, legal, product, and ops teams—with clear ownership under SM&CR. Disclosures must reflect real-world understanding It's not just about format. The FCA expects firms to test, monitor, and evidence comprehension—particularly for vulnerable customers. Making best use of the Temporary Permissions Regime The FCA will launch a Temporary Permissions Regime (TPR) to support the transition. Providers must be ready to act quickly when the window opens. Prepare for registration Ensure that internal records, model documentation, and business models are clearly aligned with regulatory expectations. Conduct a readiness assessment Review decisioning processes, affordability checks, complaints management, and financial crime controls. Plan for dual-track execution Meet TPR requirements while simultaneously building toward full authorisation. Engage early with the FCA Establish open communication lines to reduce ambiguity and show proactivity. Plan for contingencies Prepare wind-down plans, customer messaging, and backup procedures in case of registration delays or rejections. Innovation and consumer protection can coexist The decision to exclude some legacy Consumer Credit Act requirements reflects the unique nature of BNPL: short-term, interest-free, and often accessed via digital channels. This creates space for a more relevant, user-centric approach to disclosures but it also raises the bar. Risk and compliance teams should work with product, legal, and design leads to ensure communications are: Integrated into real customer journeys Mobile-friendly and accessible Prompted by user behaviour Supported by outcome-based testing and complaints data Those who treat disclosures as a compliance task may struggle. Those who invest in relevance and usability will have stronger customer engagement and defensibility. Merchant carve-out and the risk of market distortion The decision to exclude merchant-led BNPL from the regulatory scope has sparked debate. Without oversight, merchant-offered credit could create competitive asymmetry and raise consumer protection concerns. Risk leaders should: Monitor merchant product developments and prepare for potential perimeter expansion Review all third-party merchant partnerships for regulatory dependencies Revisit financial promotions and credit broking arrangements, particularly where merchants promote BNPL products without broking permissions Regulatory costs and anticipated market impact The Treasury's impact assessment estimates: An Equivalent Annual Net Direct Cost to Business (EANDCB) of £2.3 million A Net Present Value of -£20.1 million over the assessment period over the assessment period Authorisation application fees: £5,000 to £25,000 Annual supervision fees: £10,000 to £50,000 Technology upgrades: £500,000 to £2 million per provider for systems supporting affordability, reporting, and complaints per provider for systems supporting affordability, reporting, and complaints Section 75 exposure: Estimated at 0.5% to 1.2% of transaction values With the UK's BNPL market valued at £20 billion annually, sector-wide exposure to Section 75 alone could exceed £100 million. Consolidation is expected. Government modelling suggests 20–30% of providers may exit the market post-regulation. But with global BNPL volumes growing rapidly, those who remain stand to benefit from a stronger, more trusted marketplace. How leading firms are responding Some providers have already started adjusting: Klarna Following regulatory scrutiny in Sweden, Klarna UK introduced income verification, real-time spend tracking, and risk-based onboarding. Monzo Flex Built affordability into product design from the outset, with integrated credit reporting and real-time tracking. PayPal Adopted a cross-functional compliance strategy with specialist teams, training, and documentation of governance processes. The clock is ticking and the gap between those who prepare and those who delay will widen fast. For risk leaders, this is a chance to go beyond baseline compliance, strengthening frameworks, improving customer outcomes, and shaping the future of BNPL in a regulated environment.
The Sun
04-06-2025
- Business
- The Sun
Huge change to compensation rules plotted by financial ombudsman after spike in complaints
A HUGE change to compensation rules is being plotted by the financial ombudsman after a spike in complaints. The Financial Ombudsman Service (FOS) is proposing to change the interest rate applied to the compensation awarded to consumers, to tie it to the Bank of England base rate. 1 If someone is found to have lost out because of their financial firm's errors, the ombudsman can order the business to pay compensation, plus interest. There are different types of interest businesses can be directed to pay, and one of these compensates consumers for being 'deprived' of money (not having it available to use) such as when it finds a claim has been wrongly turned down by a financial firm. The ombudsman can currently direct businesses to pay 8% interest on top of the compensation for the period their customer was out of pocket. It can also tell a business to pay 8% interest if it does not pay compensation on time. But the service said feedback suggests the interest rate 'could be better aligned with, and reflect, market conditions'. For new complaints submitted to the service, it is recommending changing the interest rate so it tracks against the Bank of England's average base rate plus one percentage point. The base rate would be calculated as an average rate over the period that the money was due until the date redress payment is made. The consultation is gathering feedback on this recommendation as well as other potential options and proposals for implementation. The Bank of England base rate currently sits at 4.25%, its lowest level in two years. Economists have speculated that two more reductions could happen this year. James Dipple-Johnstone, interim chief ombudsman at the FOS, said the service welcomes feedback 'on whether our proposed new interest rate strikes the right balance between simplicity, fairness and proportionality". The consultation will run until July 2 and the service said further proposals around its service will be brought forward in the summer.
