A coalition led by Which? has called on the Government to rethink planned reforms of the Financial Ombudsman Service, warning that some provisions of the Financial Services and Markets Bill may make it slower and harder for consumers to get redress[1].

The joint statement, published on 9 November 2026, was issued ahead of the bill's second reading in the House of Commons. Which? put its name to it alongside 15 other organisations, including Age UK, Citizens Advice, Fairer Finance, Money Saving Expert and StepChange, as well as Yvonne Fovargue, the former MP for Makerfield. The group describes the changes as "potentially devastating" reforms.

The bill began in the House of Lords and has completed its Lords stages. Parliament's bill page lists the Commons second reading for 10 November 2026[2].

Who signed the statement

The signatories named in the statement are Age UK, Centre for Responsible Credit, Christians Against Poverty, Citizens Advice, Community Money Advice, Debt Justice, Fairer Finance, Financial Inclusion Centre, Institute of Money Advisers, Money Saving Expert, Money Advice Trust, National Trading Standards, StepChange, Surviving Economic Abuse and Victim Support. Yvonne Fovargue is also named.

What the coalition is asking for

The request itself is short: the coalition is asking ministers to look again at how they are proceeding. In the statement, the groups say some of the planned legislative changes would, in their view, unfairly limit and slow down consumers seeking timely, independent, impartial redress after something goes wrong with a financial firm.

Rocio Concha, Which? Director of Policy and Advocacy, said making redress slower and harder to reach would send "a chilling message", leaving ordinary people "to pick up the pieces" when powerful institutions make expensive mistakes.

The statement also attributes a warning to the FCA that some of those proposals would "gum up the system".

Clause 7: changing the fairness test

As the law stands, the Ombudsman decides each complaint by what they consider "fair and reasonable", taking the whole of the case into account[3].

Clause 7 would replace that test. Under the bill text, a complaint could be decided for the consumer only if two conditions were both met. First, the firm's conduct either broke an FCA rule that applied at the time, or no FCA rule covered that conduct. Second, that conduct also failed the "fair and reasonable" test, judged against the case as a whole[4]. The clause also lists factors the Ombudsman must weigh, including a general principle that people should be accountable for the choices they make.

The coalition sees this as abandoning a level playing field, built on an impartial fairness test, in favour of a starting point that treats the firm as being in the right. It argues consumers could face a steeper fight and could even be refused redress they would have obtained under the present test. The bill itself does not use the word "presumption"; that is the coalition's reading of how the two-part test would work in practice.

Clause 6: a referral route to the FCA

Clause 6 would require the Ombudsman to seek an FCA opinion where a relevant FCA rule is unclear in how it applies to a complaint. It would also have to alert the FCA to issues that could have a significant effect on how markets work. In some cases, the FCA could order the Ombudsman to hold off deciding a complaint until that order is lifted. Consumers and firms would both be able to ask the Ombudsman to make a referral. The Treasury could set response times for the FCA through regulations; the bill does not fix them.

The coalition says this route would take decision-making discretion away from the Ombudsman and give it to the FCA, a body it says is not built to resolve individual disputes, and warns of substantial delay and added stress for consumers.

The Consumer Duty split

The coalition also raises the prospect of what it calls "two-tier justice". The FCA applied the Consumer Duty from 31 July 2023 to products still being sold or renewed, and from 31 July 2024 to closed products[5].

The coalition's concern is that complaints about events before the Duty could lose out where a firm met a regulatory rule in a narrow sense, yet failed to meet the Duty's tighter expectations. It predicts that many tens of thousands of complaints submitted over the following year could sit in that category. That figure is the coalition's own estimate.

For context, the bill says Clauses 6 and 7 would apply to complaints made after those sections come into force, even where the events complained about happened earlier.

Why this matters for car finance complaints

Many motor finance complaints concern agreements taken out years ago, often before the Consumer Duty existed. If you have a PCP or hire purchase complaint that could end up with the Ombudsman, or you follow the wider debate about car finance mis-selling, this is one to watch.

None of this is law yet. These are proposals in a bill still going through Parliament, and they could be amended or removed before Royal Assent.

The bill also contains other Ombudsman measures that the coalition statement does not focus on. Clause 5 would set an outer time limit of ten years from the act or omission complained about, although rules could allow a later limit in specified circumstances. Clause 10 deals with complaints that fall within an FCA consumer redress scheme. How any of it would apply to an individual complaint depends on the final wording and the facts.

The information in this piece is general only and is not advice on financial or legal matters. If you are thinking about making a car finance complaint, the process for raising it with your lender has not changed because of this bill.

How this fits with earlier Ombudsman changes

This isn't the first time changes to the Ombudsman have been proposed. Back in July 2025, as the car finance scandal was growing, we covered the Government's proposals to limit the Financial Ombudsman's powers.

The Ombudsman's own complaint-handling rule changes from October 2026 are a separate matter. They set out when a complaint can be dismissed without a full investigation, and which standards apply to past conduct. Those changes went through the regulators' rulebooks. The bill works differently, because it would change the legislation the Ombudsman operates under.

For background on where the Ombudsman sits in the redress process, see our explainer on the role of the Financial Ombudsman in car finance redress.

What happens next

After Commons second reading, Parliament's bill page shows committee stage, report stage and third reading in the Commons, followed by consideration of amendments and Royal Assent. Parliament does not yet list dates for those later stages, and it notes that future dates may be provisional.

How Reclaim247 can help

If you've lost the paperwork or aren't sure who the lender was, Reclaim247 can help identify historic motor finance agreements using credit reference and vehicle registration (VRM) checks, and review whether they are worth looking into.

Where appropriate, our partner law firms may review your case and help take a car finance claim forward on a no win, no fee basis, subject to terms and conditions.

You don't have to use us. You can complain to your lender yourself, free of charge.

If you'd like to see whether you had an agreement that may be worth checking, you can start a car finance check online.

Reclaim247.co.uk is a trading style of Claimsline Group Ltd, registered in England and Wales, Company registration number 09071409. Claimsline Group Ltd is authorised and regulated by the Financial Conduct Authority in respect of regulated claims management activities FRN Number is 831196.

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References:

1. A coalition led by Which? has called on the Government to rethink planned reforms of the Financial Ombudsman Service, warning that some provisions of the Financial Services and Markets Bill may make it slower and harder for consumers to get redress  - https://www.which.co.uk/policy-and-insight/article/hands-off-the-financial-ombudsman-service-which-mse-and-leading-charities-demand-halt-to-potentially-devastating-reforms-aP2iE5s3QpJT
2. The bill began in the House of Lords and has completed its Lords stages. Parliament's bill page lists the Commons second reading for 10 November 2026  - https://bills.parliament.uk/bills/4129
3. As the law stands, the Ombudsman decides each complaint by what they consider "fair and reasonable", taking the whole of the case into account - https://www.legislation.gov.uk/ukpga/2000/8/section/228
4. that conduct also failed the "fair and reasonable" test, judged against the case as a whole - https://publications.parliament.uk/pa/bills/cbill/59-02/0152/260152.html
5. The FCA applied the Consumer Duty from 31 July 2023 to products still being sold or renewed, and from 31 July 2024 to closed products - https://www.fca.org.uk/publications/policy-statements/ps22-9-new-consumer-duty