Financial companies may be pressurising consumers to prevent them complaining to the Financial Ombudsman Service, the FSA has warned.
The City watchdog said firms are falsely telling consumers they have to pay if they lose their case, and consumers should not be dissuaded from taking action.
The FSA has now issued a warning to consumers telling them not to believe these threats. The watchdog suggested that some of the offending companies are small Independent Financial Advisers (IFAs).
Firms who regulated by the FSA must pay a levy to the Financial Ombudsman Service to handle complaints, but many small firms are struggling to cope with rising liability costs.
The FSA website released a statement saying: "It has come to the FSA's attention that several firms are seeking to recover the costs of dealing with complaints they receive from consumers where those complaints are rejected.
"In particular, these firms are indicating that should the consumer take the complaint to the Financial Ombudsman Service (FOS), and the Ombudsman not uphold the complaint, the consumer will have to bear the costs that the firm has incurred in preparing its case.
"The FSA would like to stress that the FOS is a free service to consumers."
