TL;DR

The Financial Ombudsman Service (FOS) is picking up the phone more often because complaints drafted with AI tools are longer, less accurate and slower to resolve. Speaking to the Financial Times, the FOS’s chief ombudsman, James Dipple-Johnstone, said the worst example he had come across was a consumer submission in which only two of 39 references were correct (37 wrong), as Insurance Business reported on 27 October.

What the ombudsman is seeing

The FOS has watched the pattern for several months. When it reviewed a small batch of cases earlier this year, as many as a third of replies to its initial assessments looked to have been written, or heavily shaped, by AI. Some submissions now exceed 200 pages, and lawyers and claims management firms are using the tools on consumers’ behalf too.

Dipple-Johnstone told the FT that this material can hide the real dispute under irrelevant detail. The cost lands on caseworkers, who must check cited legislation and case rulings that turn out to be irrelevant or invented. The ombudsman accepts that AI can help people set out clearer arguments; its fix is a direct conversation with the consumer to find the actual problem.

A service under pressure

The timing is awkward. Over the opening six months of 2026/27 the FOS received 110,500 cases, with 57,000 arriving in the second quarter alone; 25,800 of the half-year total concerned insurance. It links the rise partly to cost-of-living strain and partly to wider AI use. Since 1 October it has had powers to throw out complaints, letting it focus on the disputes it exists to resolve without going to court.

A bigger wave may follow. Dipple-Johnstone told the FT that motor finance complaints on hand already number almost 100,000. Insurance Business adds that hundreds of thousands more could follow if the FCA’s redress scheme is quashed at its Upper Tribunal hearing in February. Separately, a bill before Parliament would narrow the ombudsman’s remit and bring in a ten-year time limit on complaints.

Context

The pattern echoes our coverage of AI-written complaints reaching UK public bodies. In our view the strain is the same in both places: tools that make complaining easier also make each complaint harder to handle.

Looking Forward

For insurers, lenders and brokers, these complaints arrive before the ombudsman ever sees them. In our view, firms that answer the substance in plain final response letters, and pick up the phone early as the FOS now does, will spend less time rebutting invented citations line by line.