What happens if you have a complaint about a financial product or service and the company you took it out with won’t resolve the issue? That’s where the Financial Ombudsman Service (FOS) comes in.

Find out what the FOS is and how it can help resolve disputes and even get you compensation.

What is the Financial Ombudsman Service?

The Financial Ombudsman Service is an independent body established by Parliament in 2000 to settle disputes between UK-based financial companies and their customers.

If you’ve got a complaint about a product or service, first you need to contact the company in question. If it is unable to provide a suitable resolution to the issue, you can take your complaint to the FOS.

The FOS will look at both sides of the complaint – the customer and the company – before providing advice (if the complaint was the result of a misunderstanding) or making decisions, such as ordering compensation, based on the facts provided.

The service is absolutely free with the body providing advice on all financial matters from PPI to mortgages and insurance to credit cards, as long as company is overseen by the Financial Conduct Authority (FCA), the UK’s independent financial regulatory body.

Using the Ombudsman is generally cheaper than going through the courts to get a resolution. Not only does it take into consideration the law of the land, but it also ensures that financial companies have followed regulations issued by the financial regulators which state they must ‘treat customers fairly’.

While there is no guarantee that you will win just because you have got the FOS involved in your case, every year thousands of people do get a positive outcome with their help.

How to make a complaint

Complain to the company

While the FOS will deal with complaints where companies and customers have failed to reconcile, you shouldn’t use them as a first port of call.

The first step when you have a problem with a financial product or service is to complain to the company in question. It has eight weeks within which to respond to the complaint.

If it fails to respond or sends you a letter rejecting your complaint (also known as a letter of deadlock), you can then take the matter to the FOS. It’s worth noting that once you inform a company you’re planning on involving the FOS, you may find they are more willing to pay you what you think you are owed, rather than going through a thorough investigation.

Complain to the Financial Ombudsman

If you have no luck with your financial service provider, then it’s time to escalate your complaint to the FOS, which is a relatively simple process. To complain you need to fill out a Financial Ombudsman Service complaints form which you can find on the FOS website.

You can fill the form out online or print it off and post it, attaching any relevant information, correspondence or documents. Alternatively, you could call them on 0800 0234 567 and they will take you through the form.

A case worker will then be assigned and start investigating the complaint. If they rule in your favour, they have the power to ask the company in question to pay up to £150,000 in compensation. In reality, most cases involve a significantly smaller amount of compensation.

How long does it take?

Most complaints submitted to the FOS are resolved within a couple of months of submission. Some are settled within weeks and over three quarters are settled within three months.

However, some cases can take a lot longer as they are more complex. According to the FOS website, complaints about mis-sold PPI could take up to two years to resolve due to the number of people asking for help.

Can you ‘back-date’ a complaint?

There are a number of rules about deadlines for making complaints via the FOS. You either need to complain within three years from the time you knew you could make the complaint, for example if a ruling has been made about making a claim, or six years from the event you’re complaining about.

Either way, you need to contact the Ombudsman with six months of your last contact with the firm you’re complaining about, otherwise you’ll have to start the whole process again.

What if you don’t agree with the outcome?

While thousands of people each year win cases adjudicated by the FOS, not all complaints have a favourable outcome for the complainant. If you or the company you are complaining about disagree with the outcome an appeal can be requested.

In this instance the case will be reviewed again by one of the FOS ombudsmen, rather than a caseworker. Once the complaint has been reviewed again the decision of the ombudsman is final and no other ombudsman, no matter how senior, can overturn it.

If the matter is still in dispute after this second round of reviewing, it can then be taken to court. However, bear in mind that any court action could prove costly and there is no guarantee that you will win.

[Read more: Three key consumer rights laws you should know about]