Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) is a means of resolving disputes without going to court. The process can be cheaper, quicker and less stressful.

The UK operates two types of ADR scheme: the statutory Financial Ombudsman Service (FOS); and various robust self-regulatory mechanisms such as FLA’s Lending Code.  

The FLA’s Lending Code

The FLA’s Lending Code has been helping to resolve consumer complaints since 1992.

The Code is binding on FLA members. It sets out standards of good practice for the finance industry and provides consumers with the reassurance that they are dealing with reputable organisations.

It gives consumers rights that go beyond those provided by law. It requires companies to ensure that all loans (including credit and store cards) go through a ‘sound and proper credit assessment’ and that companies ‘act fairly reasonably and responsibly in all dealings’.  

The FLA’s Conciliation Service

The Code is backed by a free complaints and conciliation scheme for customers. Making use of the FLA’s scheme does not remove any statutory rights to redress and if customers remain dissatisfied, their complaints can ultimately be referred to the FOS. This provides a successful and flexible blend of self-regulation, non-statutory and statutory ADR.

The vast majority of complaints are successfully resolved without having to refer to the Ombudsman. 

The FLA’s view on self-regulation

The FLA is a strong supporter of alternative dispute resolution (ADR), which is an integral part of our Lending Code.

Self-regulation of this kind provides a flexible adjunct to the statutory system, and can adapt quickly to changing market conditions. It also encourages industry best practice.

We believe that the European Commission should encourage Member States and businesses to make use of ADR.