Section 59: Financial Services Ombudsman scheme to apply to consumer credit licensees
100.Section 59 inserts a new section 226A into FSMA introducing the new consumer credit jurisdiction and will require holders of standard licences under the 1974 Act (and persons authorised to wind up a licensable business under new section 34A inserted by section 32 of the 2006 Act) to submit to the jurisdiction of the scheme. The Secretary of State may bring within the consumer credit jurisdiction types of business for which a licence is required under the 1974 Act. The scheme operator may make rules to describe the complaints it will and will not deal with under the jurisdiction it has been given. For example, if the Secretary of State was to apply the jurisdiction to “consumer credit businesses”, FOS could consider (among other things) acts or omissions relating to advice on credit, the making of agreements, or the administration of accounts. The section sets out the circumstances in which a complaint can be dealt with: namely, that the complainant meets the relevant eligibility criteria (set by the new section 226A) and wishes for FOS to consider the case; that the complaint falls within a description specified by FOS in its consumer credit rules; and that the business being complained about falls within the remit of the consumer credit jurisdiction. Finally, if the complaint can be dealt with under FOS’s existing compulsory jurisdiction it will not be dealt with under consumer credit jurisdiction (e.g. a complaint involving an FSA authorised firm engaging in consumer credit activity will be covered by FSA’s rules under section 226 of FSMA, rather than FOS’s rules under section 226A).
101.Section 226A(7) makes provision for the making of rules in relation to the consumer credit jurisdiction by FOS. Such rules must be approved by FSA.