DISP 2

Jurisdiction of the Financial Ombudsman Service

DISP 2.1

Purpose, interpretation and application

Purpose

DISP 2.1.1

See Notes

handbook-guidance
The purpose of this chapter is to set out rules and guidance on the scope of the Compulsory Jurisdiction, the Consumer Credit Jurisdiction and the Voluntary Jurisdiction, which are the Financial Ombudsman Service's three jurisdictions:
(1) the Compulsory Jurisdiction is not restricted to regulated activities and covers:
(a) certain complaints against firms (and businesses which were firms at the time of the events complained about); and
(2) the Consumer Credit Jurisdiction covers certain complaints against licensees (and businesses which were licensees at the time of the events complained about); and
(3) the Voluntary Jurisdiction covers certain complaints against VJ participants, including in relation to events before they joined the Voluntary Jurisdiction.

DISP 2.1.3

See Notes

handbook-guidance
The Ombudsman Transitional Order requires the Financial Ombudsman Service to complete the handling of relevant existing complaints, in a significant number of respects, in accordance with the requirements of the relevant former scheme rather than in accordance with the requirements of this chapter.

Interpretation

DISP 2.1.4

See Notes

handbook-guidance
In this chapter, carrying on an activity includes:
(1) offering, providing or failing to provide a service in relation to an activity;
(2) administering or failing to administer a service in relation to an activity; and
(3) the manner in which a respondent has administered its business, provided that the business is an activity subject to the Financial Ombudsman Service's jurisdiction.

Purpose

DISP 2.1.5

See Notes

handbook-guidance
In this chapter, ancillary banking services include, for example, the provision and operation of cash machines, foreign currency exchange, safe deposit boxes and account aggregation services (services where details of accounts held with different financial service providers can be accessed by a single password).

Application

DISP 2.1.6

See Notes

handbook-rule
This chapter applies to the Ombudsman and to respondents.

DISP 2.1.7

See Notes

handbook-directions
Part XVI of the Act (The Ombudsman Scheme), particularly section 226 (Compulsory jurisdiction), applies to members of the Society of Lloyd's in respect of the regulated activities of effecting or carrying out contracts of insurance written at Lloyd's.

DISP 2.2

Which complaints can be dealt with under the Financial Ombudsman Service?

DISP 2.2.1

See Notes

handbook-guidance
The scope of the Financial Ombudsman Service's three jurisdictions depends on:
(1) the type of activity to which the complaint relates (see DISP 2.3, DISP 2.4 and DISP 2.5);
(2) the place where the activity to which the complaint relates was carried on (see DISP 2.6);
(3) whether the complainant is eligible (see DISP 2.7); and
(4) whether the complaint was referred to the Financial Ombudsman Service in time (see DISP 2.8).

DISP 2.3

To which activities does the Compulsory Jurisdiction apply?

DISP 2.3.1

See Notes

handbook-rule
The Ombudsman can consider a complaint under the Compulsory Jurisdiction if it relates to an act or omission by a firm in carrying on one or more of the following activities:
(3) lending money secured by a charge on land;
(4) lending money (excluding restricted credit where that is not a consumer credit activity);
(5) paying money by a plastic card (excluding a store card where that is not a consumer credit activity);
(6) providing ancillary banking services;
or any ancillary activities, including advice, carried on by the firm in connection with them.

DISP 2.3.2

See Notes

handbook-guidance
The Ombudsman can also consider under the Compulsory Jurisdiction:
(1) as a result of the Ombudsman Transitional Order, a relevant existing complaint or a relevant new complaint that relates to an act or omission by a firm or an unauthorised person which was subject to a former scheme immediately before commencement; or
(2) as a result of the Mortgages and General Insurance Complaints Transitional Order, a relevant transitional complaint that relates to an act or omission by a firm (or an unauthorised person that ceased to be a firm after the relevant commencement date) which was subject to a former scheme at the time of the act or omission;
provided that:
(3) the act or omission occurred in the carrying on by that firm or unauthorised person of an activity to which that former scheme applied; and
(4) the complainant is eligible and wishes to have the complaint dealt with by the Ombudsman.

DISP 2.3.3

See Notes

handbook-guidance
Complaints about acts or omissions by a firm include complaints about acts or omissions in respect of activities for which the firm is responsible (including business of any appointed representative for which the firm has accepted responsibility).

DISP 2.3.4

See Notes

handbook-rule
A complaint about an authorised professional firm cannot be handled under the Compulsory Jurisdiction of the Financial Ombudsman Service if it relates solely to a non-mainstream regulated activity and can be handled by a designated professional body.

DISP 2.4

To which activities does the Consumer Credit Jurisdiction apply?

DISP 2.4.1

See Notes

handbook-rule
The Ombudsman can consider a complaint under the Consumer Credit Jurisdiction if:
(1) it is not covered by the Compulsory Jurisdiction; and
(2) it relates to an act or omission by a licensee in carrying on
(a) one or more consumer credit activities; or
(b) any ancillary activities, including advice, carried on by the licensee in connection with them.

DISP 2.5

To which activities does the Voluntary Jurisdiction apply?

DISP 2.5.1

See Notes

handbook-rule
The Ombudsman can consider a complaint under the Voluntary Jurisdiction if:
(1) it is not covered by the Compulsory Jurisdiction or the Consumer Credit Jurisdiction; and
(2) it relates to an act or omission by a VJ participant in carrying on one or more of the following activities:
(a) an activity carried on after 28 April 1988 which:
(i) was not a regulated activity at the time of the act or omission, but
(ii) was a regulated activity when the VJ participant joined the Voluntary Jurisdiction (or became an authorised person, if later);
(b) a financial services activity carried on after commencement by a VJ participant which was covered in respect of that activity by a former scheme immediately before the commencement day;
(c) activities which (at 1 July 2007) were regulated activities or would be regulated activities if they were carried on from an establishment in the United Kingdom (these activities are listed in DISP 2 Annex 1);
(d) activities which would be consumer credit activities if they were carried on from an establishment in the United Kingdom
(e) lending money secured by a charge on land;
(f) lending money (excluding restricted credit where that is not a consumer credit activity );
(g) paying money by a plastic card (excluding a store card where that is not a consumer credit activity );
(h) providing ancillary banking services;
(i) acting as an intermediary for a loan secured by a charge over land;
(j) acting as an intermediary for general insurance business or long-term insurance business;
(k) National Savings and Investments' business;
or any ancillary activities, including advice, carried on by the VJ participant in connection with them.

DISP 2.5.2

See Notes

handbook-guidance
The scope of the Voluntary Jurisdiction is wider than that of the Compulsory Jurisdiction, and so some activities are referred to in both jurisdictions.

DISP 2.5.3

See Notes

handbook-guidance
DISP 2.5.1R (2)(a)is for those that are subject to the Compulsory Jurisdiction for regulated activities but are not covered by the Ombudsman Transitional Order or the Mortgage and General Insurance Complaints Transitional Order. It enables the Financial Ombudsman Scheme to cover complaints about earlier events relating to those activities before they became regulated activities.

DISP 2.5.4

See Notes

handbook-guidance
DISP 2.5.1R (2)(b) is for those that were members of one of the former schemes replaced by the Financial Ombudsman Service immediately before commencement. It enables the Financial Ombudsman Service to cover complaints that arise out of acts or omissions occurring after commencement for any activities which are not covered by the Compulsory Jurisdiction but that would have been covered by the relevant former scheme.

DISP 2.5.5

See Notes

handbook-rule
The Voluntary Jurisdiction covers an act or omission that occurred before the VJ participant was participating in the Voluntary Jurisdiction, and whether the act or omission occurred before or after commencement, either:
(1) if the complaint could have been dealt with under a former scheme; or
(2) under the agreement by the VJ participant in the Standard Terms.

DISP 2.6

What is the territorial scope of the relevant jurisdiction?

Compulsory Jurisdiction

DISP 2.6.1

See Notes

handbook-rule
The Compulsory Jurisdiction covers complaints about the activities of a firm (including its appointed representatives) carried on from an establishment in the United Kingdom.
(1) [deleted]
(2) [deleted]
(3) [deleted]
(4) [deleted]
(5) [deleted]
(6) [deleted]

DISP 2.6.2

See Notes

handbook-guidance
This:
(1) includes incoming EEA firms and incoming Treaty firms; but
(2) excludes complaints about business conducted in the United Kingdom on a services basis from an establishment outside the United Kingdom.

Consumer Credit Jurisdiction

DISP 2.6.3

See Notes

handbook-rule
The Consumer Credit Jurisdiction covers only complaints about the activities of a licensee carried on from an establishment in the United Kingdom.

Voluntary Jurisdiction

DISP 2.6.4

See Notes

handbook-rule
The Voluntary Jurisdiction covers only complaints about the activities of a VJ participant carried on from an establishment:
(1) in the United Kingdom; or
(2) elsewhere in the EEA if the following conditions are met:
(a) the activity is directed wholly or partly at the United Kingdom (or part of it);
(b) contracts governing the activity are (or, in the case of a potential customer, would have been) made under the law of England and Wales, Scotland or Northern Ireland; and
(c) the VJ participant has notified appropriate regulators in its Home State of its intention to participate in the Voluntary Jurisdiction.

Location of the complainant

DISP 2.6.5

See Notes

handbook-guidance
A complaint can be dealt with under the Financial Ombudsman Service whether or not the complainant lives or is based in the United Kingdom.

DISP 2.7

Is the complainant eligible?

DISP 2.7.1

See Notes

handbook-rule
A complaint may only be dealt with under the Financial Ombudsman Service if it is brought by or on behalf of an eligible complainant.

DISP 2.7.2

See Notes

handbook-rule
A complaint may be brought on behalf of an eligible complainant (or a deceased person who would have been an eligible complainant) by a person authorised by the eligible complainant or authorised by law. It is immaterial whether the person authorised to act on behalf of an eligible complainant is himself an eligible complainant.

Eligible complainants

DISP 2.7.3

See Notes

handbook-rule
An eligible complainant must be a person that is:
(1) a private individual;
(2) a business, which has a group annual turnover of less than ?1 million at the time the complainant refers the complaint to the respondent;
(3) a charity which has an annual income of less than £1 million at the time the complainant refers the complaint to the respondent; or
(4) a trustee of a trust which has a net asset value of less than £1 million at the time the complainant refers the complaint to the respondent.

DISP 2.7.4

See Notes

handbook-guidance
A business includes a sole trader, a company, an unincorporated body and a partnership carrying on any trade or profession. A subsidiary of a corporate group will be eligible only where the corporate group as a whole meets the turnover test.

DISP 2.7.5

See Notes

handbook-guidance
If a respondent is in doubt about the eligibility of a business, charity or trust, it should treat the complainant as if it were eligible. If the complaint is referred to the Financial Ombudsman Service, the Ombudsman will determine eligibility by reference to appropriate evidence, such as audited accounts or VAT returns.

DISP 2.7.6

See Notes

handbook-rule
To be an eligible complainant a person must also have a complaint which arises from matters relevant to one or more of the following relationships with the respondent:
(1) the complainant is (or was) a customer of the respondent;
(2) the complainant is (or was) a potential customer of the respondent;
(3) the complainant is the holder, or the beneficial owner, of units in a collective investment scheme and the respondent is the operator or depositary of the scheme;
(4) the complainant is a beneficiary of, or has a beneficial interest in, a personal pension scheme or stakeholder pension scheme;
(5) the complainant is a person for whose benefit a contract of insurance was taken out or was intended to be taken out with or through the respondent;
(6) the complainant is a person on whom the legal right to benefit from a claim against the respondent under a contract of insurance has been devolved by contract, assignment, subrogation or legislation (save the European Community (Rights against Insurers) Regulations 2002);
(7) the complainant relied in the course of his business on a cheque guarantee card issued by the respondent;
(8) the complainant is the true owner or the person entitled to immediate possession of a cheque or other bill of exchange, or of the funds it represents, collected by the respondent for someone else's account;
(9) the complainant is the recipient of a banker's reference given by the respondent;
(10) the complainant gave the respondent a guarantee or security for:
(a) a mortgage;
(b) a loan;
(c) an actual or prospective regulated consumer credit agreement;
(d) an actual or prospective regulated consumer hire agreement; or
(e) any linked transaction as defined in the Consumer Credit Act 1974 (as amended);
(11) the complainant is a person about whom information relevant to his financial standing is or was held by the respondent in operating a credit reference agency as defined by section 145(8) of the Consumer Credit Act 1974 (as amended);
(12) the complainant is a person from whom the respondent has sought to recover payment under a regulated consumer credit agreement or regulated consumer hire agreement in carrying on debt-collecting as defined by section 145 (7) of the Consumer Credit Act (1974) (as amended); or
(13) the complainant is a beneficiary under a trust or estate of which the respondent is trustee or personal representative.

DISP 2.7.7

See Notes

handbook-guidance
DISP 2.7.6R (5)and DISP 2.7.6R (6) include, for example, employees covered by a group permanent health policy taken out by an employer, which provides in the insurance contract that the policy was taken out for the benefit of the employee.

DISP 2.7.8

See Notes

handbook-guidance
In the Compulsory Jurisdiction, under the Ombudsman Transitional Order and the Mortgages and General Insurance Complaints Transitional Order, where a complainant:
(1) wishes to have a relevant new complaint or a relevant transitional complaint dealt with by the Ombudsman; and
(2) is not otherwise eligible; but
(3) would have been entitled to refer an equivalent complaint to the former scheme in question immediately before the relevant transitional order came into effect;
if the Ombudsman considers it appropriate, he may treat the complainant as an eligible complainant.

Exceptions

DISP 2.7.9

See Notes

handbook-rule
The following are not eligible complainants:
(1) (in all jurisdictions) a firm, licensee or VJ participant whose complaint relates in any way to an activity which:
(a) the firm itself has permission to carry on; or
(ab)
(b) the licensee or VJ participant itself conducts;
and which is subject to the Compulsory Jurisdiction, the Consumer Credit Jurisdiction or the Voluntary Jurisdiction;
(2) (in the Compulsory Jurisdiction) a complainant, other than a trustee of a pension scheme trust, who was:in relation to the firm and activity in question at the time of the act or omission which is the subject of the complaint; and
(3) (in the Consumer Credit Jurisdiction):
(a) a body corporate;
(b) a partnership consisting of more than three persons;
(c) a partnership all of whose members are bodies corporate; or
(d) an unincorporated body which consists entirely of bodies corporate.

DISP 2.7.10

See Notes

handbook-guidance
In the Compulsory Jurisdiction, in relation to relevant new complaints under the Ombudsman Transitional Order and relevant transitional complaints under the Mortgages and General Insurance Complaints Transitional Order:
(1) where the former scheme in question is the Insurance Ombudsman Scheme, a complainant is not to be treated as an eligible complainant unless:
(a) he is an individual; and
(b) the relevant new complaint does not concern aspects of a policy relating to a business or trade carried on by him;
(2) where the former scheme in question is the GISC facility, a complainant is not to be treated as an eligible complainant unless:
(a) he is an individual; and
(b) he is acting otherwise than solely for the purposes of his business; and
(3) where the former scheme in question is the MCAS scheme, a complainant is not to be treated as an eligible complainant if:
(a) the relevant transitional complaint does not relate to a breach of the Mortgage Code published by the Council of Mortgage Lenders;
(b) the complaint concerns physical injury, illness, nervous shock or their consequences; or
(c) the complainant is claiming a sum of money that exceeds £100,000.

DISP 2.8

Was the complaint referred to the Financial Ombudsman Service in time?

DISP 2.8.1

See Notes

handbook-rule
The Ombudsman can only consider a complaint if:
(1) the respondent has already sent the complainant its final response; or
(2) eight weeks have elapsed since the respondent received the complaint.

DISP 2.8.2

See Notes

handbook-rule
The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service:
(1) more than six months after the date on which the respondent sent the complainant its final response; or
(2) more than:
(a) six years after the event complained of; or (if later)
(b) three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint;
unless the complainant referred the complaint to the respondent or to the Ombudsman within that period and has a written acknowledgement or some other record of the complaint having been received;
unless:
(3) in the view of the Ombudsman, the failure to comply with the time limits was as a result of exceptional circumstances; or
(4) the Ombudsman is required to do so by the Ombudsman Transitional Order; or
(5) the respondent has not objected to the Ombudsman considering the complaint.

DISP 2.8.3

See Notes

handbook-guidance
The six-month time limit is only triggered by a response which is a final response. A final response must tell the complainant about the six-month time limit that the complainant has to refer a complaint to the Financial Ombudsman Service.

DISP 2.8.4

See Notes

handbook-guidance
An example of exceptional circumstances might be where the complainant has been or is incapacitated.

Reviews of past business

DISP 2.8.5

See Notes

handbook-rule
The six-year and the three-year time limits do not apply where:
(1) the time limit has been extended under a scheme for review of past business approved by the Treasury under section 404 of the Act (Schemes for reviewing past business); or
(2) the complaint concerns a contract or policy which is the subject of a review directly or indirectly under:
(a) the terms of the Statement of Policy on 'Pension transfers and Opt-outs' issued by the FSA on 25 October 1994; or
(b) the terms of the policy statement for the review of specific categories of FSAVC business issued by the FSA on 28 February 2000.

Mortgage endowment complaints

DISP 2.8.6

See Notes

handbook-guidance
If a complaint relates to the sale of an endowment policy for the purpose of achieving capital repayment of a mortgage, the receipt by the complainant of a letter which states that there is a risk (rather than a high risk) that the policy would not, at maturity, produce a sum large enough to repay the target amount is not, itself, sufficient to cause the three year time period in DISP 2.8.2R (2) to start to run.

DISP 2.8.7

See Notes

handbook-rule
(1) If a complaint relates to the sale of an endowment policy for the purpose of achieving capital repayment of a mortgage and the complainant receives a letter from a firm or a VJ participant warning that there is a high risk that the policy will not, at maturity, produce a sum large enough to repay the target amount then, subject to (2), (3), (4) and (5):
(a) time for referring a complaint to the Financial Ombudsman Service starts to run from the date the complainant receives the letter; and
(b) ends three years from that date ("the final date").
(2) Paragraph (1)(b) applies only if the complainant also receives within the three year period mentioned in (1)(b) and at least six months before the final date an explanation that the complainant's time to refer such a complaint would expire at the final date.
(3) If an explanation is given but is sent outside the period referred to in (2), time for referring a complaint will run until a date specified in such an explanation which must not be less than six months after the date on which the notice is sent.
(4) A complainant will be taken to have complied with the time limits in (1) to (3) above if in any case he refers the complaint to the firm or VJ participant within those limits and has a written acknowledgement or some other record of the complaint having been received.
(5) Paragraph (1) does not apply if the Ombudsman is of the opinion that, in the circumstances of the case, it is appropriate for DISP 2.8.2R (2) to apply.

DISP 2 Annex 1

Regulated activities at 1 July 2007

See Notes

handbook-guidance
The activities which (at 1 July 2007) were regulated activities were, in accordance with section 22 of the Act (The classes of activity and categories of investment), any of the following activities specified in Part II of the Regulated Activities Order:
(1) accepting deposits (article 5);
(2) issuing electronic money (article 9B);
(3) effecting contracts of insurance (article 10(1));
(15) managing investments (article 37);
(26) advising on investments (article 53);
(35) entering into a home reversion plan (article 63B(1));
(36) administering a home reversion plan (article 63B(2));
(37) entering into a home purchase plan (article 63F(1));
(38) administering a home purchase plan (article 63F(2));
which is carried on by way of business and relates to a specified investment applicable to that activity or, in the case of (20), (21), (22) and (23), is carried on in relation to property of any kind.