Allegiant Finance Services, a leading Claims Management Company (CMC), has expressed deep concern over the recent decision by the Financial Ombudsman Service (FOS) to impose a £250 fee per claim on CMCs. The company, which has reclaimed over £100 million for victims of unaffordable subprime lending, warns that this decision will have a discriminatory impact on financially excluded communities.
The FOS, which is responsible for resolving disputes between financial institutions and their customers, announced the new fee structure on Friday 7 February, 2025. This decision comes amidst reports that the FOS CEO & Chief Ombudsman Abby Thomas has been ousted following internal disputes over claims management fees.
According to Allegiant, the newly confirmed £250 flat fee applies regardless of the value of the claim, whether it is £50 or £300,000. This structure could economically block access to professional representation for lower-value claims, leaving vulnerable unaffordable lending victims without the option of professional support in disputes against lenders.
Jemma Marshall, Director at Allegiant, highlights the discriminatory impact this fee structure will have on certain demographics. She states that studies, including Fair4All Finance’s Levelling the Playing Field report, show that individuals from minority ethnic groups and financially excluded consumers are more likely to rely on high-cost credit. By making professional representation unviable for lower-value claims, the FOS fee structure undermines access to justice for those most in need.
Allegiant’s Head of Product, a former contractor within FOS’s unaffordable lending team, warns that the £250 flat fee threatens to shut out consumers with modest claims, despite the fact that even small payouts can be life-changing. Jemma Marshall adds that this is “discrimination in plain sight” and suggests that the FOS CEO Abby Thomas may have paid with her job for correctly identifying the potential impact of this fee structure.
With the Treasury Select Committee set to question FOS’s interim leader on Tuesday, Allegiant is urging MPs to scrutinize the policy’s potentially unlawful impact. The company argues that if any fee structure economically excludes lower-yield claims linked to protected characteristics, it must be revised or scrapped altogether. They also state that FOS must reform its approach to avoid pricing out claims management companies and, by extension, vulnerable consumers.
Allegiant is calling for intervention and urging FOS to ensure equality in access to justice, aligning with Rachel Reeves’ growth agenda. The company believes that FOS must revise its approach to avoid denying justice to those who need it most. Allegiant argues that the FOS’ reluctancy to implement a fee structure that removes economic barriers to representation for those with vulnerability cannot be justified, especially when other mechanisms are available.
For media comment, please contact jemma.marshall@allegiant.co.uk or stephen.griffiths@allegiant.co.uk.
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.