Welcome to the UKGI weekly regulation update service for Aviva ABC brokers

Context

The FOS has published its 2025/26 plans and budget, setting itself ambitious targets to address significant demand and to improve the efficiency of its case resolution processes, according to plans for the year ahead published today. 

Key points to note and next actions

In its plans for 2025/26, the FOS highlights its commitment to resolve 270,000 cases, which is 20% more than 2024/25.  The commitment is made despite recent surges in complaints, most notably the influx of cases related to motor finance commission. Motor finance commission cases, which cannot currently be resolved due to ongoing legal and regulatory action, account for almost half of FOS current 190,000 cases.

On top of the existing 190,00 cases, the FOS anticipates receiving a further 209,000 complaints throughout the year, which is a slight increase compared to complaint levels seen in 2022/23 and 2023/24, but a significant drop on the 330,000 cases estimated to have been received during 2024/25 which is elevated due to the impact of motor finance commission complaints.

As well as the commitment to resolve a higher volume of cases, the FOS has also frozen case fees for businesses, to ensure fairness and value for money, and has introduced a new charging model for professional representatives..

It also has plans to modernise the redress system. Exceptional demand strains resources and underlines the need for reform around mass redress events. Collaborating closely with HM Treasury and the Financial Conduct Authority (FCA), FOS is embarking on a transformative journey to modernise both its service and the wider redress system. The aim is to ensure it can continue to resolve cases impartially and with minimal formality, and to prevent financial issues from escalating into widespread disputes, reducing uncertainty for firms and enhancing outcomes for consumers.  

The improvements being made by the FOS are made with the aims of:

• Modernising its processes to ensure businesses and consumers benefit from a faster, more effective dispute resolution service.
• Committing to providing firms with better insight into complaint trends, helping to address the root causes of disputes and reducing the likelihood of cases escalating.

Full data for FOS case handling and volumes during 2024/25 will be published in the Summer

Context

The HM Treasury has published an action plan, which sets out the Government’s approach to regulation and regulators.

Key points to note and next actions

The vision, as set out in the paper, highlights four themes that it is looking for the regulatory system to focus on:

• Support growth. A regulatory system that not only protects consumers and supports competition, but also encourages new investment, innovation, and growth.
• Targeted and proportionate regulation. Regulate only where necessary and allow space for discretion and good behaviour. In most cases, businesses operate in a responsible and sensible manner.
• Transparency and predictability. To foster the certainty essential for investment, it is vital that the regulatory regime is stable, predictable and consistent.
• Adapt to keep pace with innovation. The approach to regulation must allow the UK to take advantage of new technologies and innovations, including artificial intelligence, digitalisation, decarbonisation and increased automation.

Included in the paper are key regulator pledges, from regulators including the FCA and PRA, The Pensions Regulator, Environment Agency, Civil Aviation Authority, ICO, Ofcom, HSE, etc

Among the FCA pledges are:

• Provide 50% more dedicated supervisors to early and high growth firms, to help them navigate the regulatory system and support their growth.
• Indicate more often that the FCA is ‘minded to approve’ start ups to help them secure funding.
• Reduce regulatory reporting requirements for firms.

Context

Effective from 31 March 2025, the FCA has opened its My FCA portal

Key Points to note and next actions

The FCA are aiming to make it easier for firms to fulfil their regulatory obligations with My FCA, which is a single log-in for its RegData, Connect and Online Invoicing Systems and includes a view of returns and attestations that are due.

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The FCA has added links to its court submissions to its ‘Information for firms on motor finance complaints’ web page

Key points to note and next actions

Links to the following court submission documents have been added to the web page

• Application filed in the Supreme Court – 15 January 2025
• Written submission to the Supreme Court – 10 March 2025

Context

Effective from 1 April 2025, professional representatives will be charged £250 to refer a case to the FOS due to its new charging regime.

Key points to note and next actions

Professional representatives will now only be able to refer ten cases (per financial year) to the FOS for free. After that, each subsequent case will be charged £250. However, they will receive £175 back in credit if the complaint is found in favour of the consumer they represent, reducing the charge they pay to £75.

If a complaint referred by a professional representative is not upheld or is withdrawn, the financial business against whom the complaint was made will pay a reduced case fee of £475, instead of £650.

The FOS is and will remain free to all those who bring their cases directly, as well as to families and friends, charities, and voluntary organisations who may be helping them