Turning back time: FCA and FOS clash over historic consumer credit claims

In Barclays Bank UK PLC & Ors v FOS [2026] EWHC 1555 (Admin), the High Court rejected the FOS’s (Financial Ombudsman Service) attempt to investigate consumer complaints about lending decisions made more than six years before the complaints were raised.

This decision provides welcome clarity for UK lenders over the interpretation of time limits for FOS complaints and will reduce the risk of old and stale claims being assessed. The intervention by the FCA (in support of the banks seeking judicial review against the FOS) highlights the critical importance of this decision for parties involved in consumer credit disputes.

What limits apply to FOS complaints?

The FOS can only consider complaints that are within its jurisdiction. Its jurisdiction is determined by applying the Dispute Resolution (DISP) Rules in the FCA Handbook. Generally speaking, a complainant has to complain to the FOS within six years of the event being complained about, or, if later, within three years from when they ought reasonably to have become aware that they had a reason to complain (the ‘three-year rule’).

In cases where it is not clear whether the FOS has jurisdiction to consider a complaint, it will first make an assessment on jurisdiction before considering the merits of the allegations raised. Only where the FOS determines that a complaint falls within its jurisdiction will it then progress to assess the merits of the underlying complaint.

Historically, the FOS has taken the approach that it cannot consider complaints about events that took place over six years before a complaint was made. An exception applies where the consumer was unaware that they had cause to complain until later, in which case they have three years from the date on which, in the FOS’s view, they ought reasonably to have become aware that they had such a cause. However, in the four jurisdiction decisions challenged by the judicial review, the FOS changed its approach.

Background

The subject matter of each complaint related to alleged irresponsible lending. In each jurisdiction decision, the FOS had held that lenders had an ‘ongoing corrective responsibility’ to remedy unfair credit relationships. The FOS argued that a corrective responsibility could be derived from the 2023 Supreme Court case of Smith v RBS (UKSC/2022/0004), and that the 2014 Supreme Court decision in Plevin v Paragon Personal Finance (UKSC/2014/0037) also pointed towards a duty of corrective responsibility.

In each case, the FOS asserted jurisdiction to consider the duration of the entire credit relationship between the bank and consumer on the basis that the complaints involved continuing omissions by the banks to correct unfair creditor-debtor relationships. The FOS had decided that these so-called omissions ran right up until the end of the consumer credit relationship or, if the relationship was ongoing, date of assessment of the complaints. It had decided that a bank’s continuing failure to correct an unfair relationship could amount to a fresh ‘event’ for the purposes of the DISP rules on time limits.

The FOS also argued that, even if some of the original lending decisions had been made more than six years before the complaint, a later act by a lender within the six-year period (an example might include a lender increasing a customer’s credit limit), could bring the wider credit relationship within its jurisdiction. The FOS’s position was that once it had jurisdiction to consider such an in-time, later act, it could assess the fairness of the entire lending relationship, including the original lending decision.

The court rejected this. In practical terms, while a complaint about a later lending decision or other positive act by a lender within the six-year period may itself fall within the FOS’s jurisdiction, that does not permit the FOS to assess or award redress in respect of an earlier lending decision that is out of time.

Key findings

The High Court held that the FOS’s decisions were wrong in law and unsupported by earlier case law, making the following key findings:

• neither Smith nor Plevin established or confirmed a duty of corrective responsibility, nor did this duty exist under the Consumer Credit Act;
• a fresh ‘event’ cannot be derived from an omission – a failure to correct – for the purposes of the DISP rules on time limits;
• the FOS cannot rely on more recent positive acts by a lender within the six-year time limit to establish jurisdiction over the consumer credit relationship as a whole.

Why is this important?

For UK lenders, this judgment confirms that the FOS must adhere to a strict interpretation of the DISP rules on time limits. If lenders have received any FOS jurisdiction assessments on irresponsible lending complaints pre-dating this judicial review decision, they should review them and consider whether the FOS’s decision was consistent with the judgment.

For borrowers, the case serves as a reminder that complaints about irresponsible lending must generally be made within six years of the event being complained about (often, this would mean within six years from the date on which they took out their loan, overdraft or other credit facility), unless the three year-rule applies. The FOS cannot adopt the more expansive limitation approach available in court unfair relationship claims.

Unprecedented FCA intervention and market reform

The FCA is the statutory regulator that developed the rules that govern the FOS. For the first time, this case saw the FCA intervene in judicial review proceedings against the FOS to support the banks. Its intervention suggests a deep-rooted concern that the FOS does not overstep its powers and that it adheres to the regulator’s handbook rules. It suggests that the FCA is concerned with ensuring that there is clarity about the proper limitations of the FOS’s powers on jurisdiction, and that the FOS needs to be cautious about potentially devising its own legal concepts such as ‘corrective responsibility’.

The decision also arrived at a time when the Financial Services and Markets Bill is going through Parliament. This bill introduces substantial reform to UK consumer financial services law. For example, it proposes adapting the FOS’s ‘fair and reasonable’ test so that where firms have complied with relevant FCA rules, the FOS must find that they acted fairly and reasonably. The FOS’s flexibility in the way it determines complaints will remain central to its role and value but it must take care not to overstep its remit or jurisdictional limits.

While it remains to be seen when, and in what form, the legislation will ultimately be enacted, the general thrust of the bill and the FCA’s stance when intervening both point towards the importance of greater predictability and consistency for both UK financial services firms and consumers. At the same time, there is clearly an intention to preserve the FOS’s important role as an accessible and informal alternative to litigation.