Complaints, redress and compensation questions are pure recall. There is no reasoning to fall back on if the numbers are not in your memory, which is why this small corner of R01 punishes candidates who skim it. The good news is that it is one of the quickest topics to nail down.
Internal complaint handling under DISP
The FCA rules in DISP govern how a firm must deal with a complaint from an eligible complainant.
| Requirement | Detail |
|---|---|
| Acknowledgement | Promptly, in writing |
| Summary resolution | Available where the complaint is resolved by the end of the third business day |
| Final response | Within eight weeks |
| Referral rights | The final response must tell the complainant they can go to the FOS within six months |
| Records | Complaint records kept for at least three years, five years for MiFID business |
Firms must report complaint data to the FCA twice a year and publish a complaints summary where volumes exceed the reporting threshold.
Who is an eligible complainant
- Consumers acting outside their trade or profession
- Micro enterprises with fewer than ten employees and turnover or balance sheet under two million euros
- Small charities and trusts under the relevant income or asset thresholds
- Small businesses with turnover under £6.5m, fewer than 50 employees and a balance sheet under £5m
- Certain guarantors and personal representatives
Large corporates cannot use the ombudsman, and their route is the courts.
The Financial Ombudsman Service
- The service is free to the complainant and funded by a levy plus a case fee
- Decisions are made on what is fair and reasonable in all the circumstances, taking account of law, regulation, regulator guidance and good industry practice
- An ombudsman decision is binding on the firm if the complainant accepts it, and the complainant remains free to go to court instead
- The maximum money award is uprated each April and currently sits at around £430,000 for acts or omissions on or after 1 April 2019, with a lower limit for earlier events
- The ombudsman can recommend more than the maximum, and the excess is not enforceable
- Directions, apologies and interest can be awarded alongside money
Always check the award limit published for your sitting, because it changes every April in line with inflation.
The Financial Services Compensation Scheme
The FSCS is the fund of last resort. It pays out only where a firm is in default and unable to meet claims.
| Claim type | Protection |
|---|---|
| Deposits | The deposit limit was increased from £85,000 to £120,000 per person per banking licence from 1 December 2025, so confirm which figure applies to your syllabus year |
| Temporary high balances | Up to £1m for six months, for example after a property sale or inheritance |
| Investments | £85,000 per person per firm |
| Home finance and insurance mediation | £85,000 per person per firm |
| Long term insurance, including annuities | 100% with no cap |
| Compulsory insurance, such as motor third party | 100% |
| Other general insurance | 90% |
| Pensions in an occupational scheme | Covered by the Pension Protection Fund rather than the FSCS |
The banking licence point matters. Two brands under one licence share a single limit, which is a favourite exam scenario.
Where the schemes overlap and differ
| Feature | FOS | FSCS |
|---|---|---|
| Trigger | A dispute with a solvent firm | A firm in default |
| Funding | Levy plus case fees | Levy on authorised firms |
| Cap | Around £430,000 per complaint | Depends on the product type |
| Binding | On the firm if accepted | Not a dispute process |
A useful mental model: the ombudsman decides whether the firm did something wrong, and the compensation scheme steps in when there is no firm left to pay.
Related bodies R01 tests alongside these
- The Pensions Ombudsman, for maladministration in occupational and personal schemes, with no upper award limit
- The Pension Protection Fund, for defined benefit schemes where the employer is insolvent, paying 100% for those over normal pension age and 90% subject to a cap for others
- MoneyHelper, providing free impartial guidance, including Pension Wise appointments
- The Information Commissioner for data protection complaints
- The Financial Conduct Authority and Prudential Regulation Authority, the twin peaks regulators under the Financial Services Act 2012, with the Financial Policy Committee handling macroprudential risk
How to memorise the numbers
Build a single revision card with three columns: the timeline numbers, the money limits and the percentages. Recite it before every practice session for a week. The whole card takes ninety seconds and it protects six or seven marks on the real paper.
- Timelines: three business days, eight weeks, six months, six years, three years, three years of records
- Money: £85,000, £120,000 deposits, £1m temporary high balance, around £430,000 FOS
- Percentages: 100% long term insurance, 100% compulsory insurance, 90% other general insurance
Complaints and compensation is a small learning outcome with a large marks to effort ratio. Spend an hour on the card, revisit it weekly, and treat those questions as free marks on the day.