The FOS is phoning more consumers to get to the heart of their disputes, as complaints written with AI tools add length, errors and delay to its caseload.
Chief ombudsman James Dipple-Johnstone told the Financial Times that in the most striking case he had seen, 37 of 39 references in a consumer’s submission were incorrect. He said AI-written complaints could bury the real issue under irrelevant material, creating extra work for caseworkers. The ombudsman’s response has been to make more telephone contact with consumers.
The FOS has been tracking the trend for some months. In a small sample of cases reviewed earlier this year, up to a third of responses to its initial assessments appeared to have been generated or heavily assisted by AI. It said long, inaccurate AI-generated complaints were creating unnecessary burden and extending response times.
The ombudsman has also seen claims management companies and legal representatives using AI to generate submissions on behalf of consumers. Some submissions now run to more than 200 pages.
The FOS has acknowledged that AI can help consumers make clearer, better-structured arguments. The problem is the time caseworkers must spend checking inaccurate content, including references to laws and rulings that don’t exist or don’t apply.
The pressure comes as overall complaint volumes climb. The FOS received 57,000 cases in the second quarter of 2026/27, and 110,500 in the first half of the year, including 25,800 about insurance. It said the increase may be linked to cost-of-living pressures and consumers’ growing use of AI tools.
New powers introduced on 1 October allow the ombudsman to dismiss complaints, so it can focus on cases it was set up to resolve as an informal alternative to the courts.
A larger surge may be coming. Dipple-Johnstone told the FT the ombudsman already holds almost 100,000 motor finance complaints. Several hundred thousand more could arrive if the FCA’s motor finance redress scheme, which faces an Upper Tribunal hearing in February, is quashed. He said AI tools, more hiring and contractors could help it cope, though decisions would always be made by people.
The ombudsman is also facing reform. The government plans to curb its scope through legislation now before Parliament, including limiting its ability to rule against firms that complied with regulation, requiring it to consult the FCA on unclear regulatory issues, and introducing a ten-year time limit for complaints.
For insurers, AI-generated complaints are already arriving before they reach the ombudsman. Lengthy submissions with inaccurate references take time to answer, and firms will need to respond to the substance of a complaint without being drawn into point-by-point rebuttals of irrelevant material. Clear final response letters that set out the facts and the policy wording will matter more.
For brokers handling complaints, the same applies. A short conversation with the customer, as the ombudsman is now doing, can often identify the real issue faster than working through an AI-generated document.
The trend also adds weight to the House of Lords committee’s warning last week about consumers relying on AI to research insurance. If customers use AI both to buy cover and to complain about it, clear communication of what a policy does and doesn’t cover becomes even more important.
