Start Up LoanThis page contains general information about how FOS jurisdiction rules work. Whether FOS can investigate your specific complaint depends entirely on the facts of your case. If you believe you have been refused jurisdiction unfairly, consider taking independent legal advice.
The legal framework — the specific rules that apply
Many people believe that if a lender is FCA-regulated, the Financial Ombudsman Service can automatically investigate any complaint about them. This is not correct. FOS jurisdiction is governed by specific rules in the FCA's Handbook, and those rules set a precise eligibility test.
The relevant rules are:
- DISP 2.7.1R — FOS can only consider complaints referred by or on behalf of an eligible complainant.
- DISP 2.7.3R — Sets out who counts as an eligible complainant. The categories most relevant to borrowers are consumer and micro-enterprise.
The full FCA Handbook is available at handbook.fca.org.uk.
The definition of "consumer" for FOS purposes
Under DISP 2.7.3R, a consumer means:
"an individual acting for purposes which are wholly or mainly outside that individual's trade, business, craft, or profession."
— FCA Handbook, DISP 2.7.3R
This is not the everyday meaning of the word "consumer." The FCA uses different definitions of "consumer" in different parts of its Handbook. The definition that governs FOS eligibility is the one above — and it turns entirely on the purpose of the borrowing, not the name on the loan agreement.
In applying this test, FOS does not simply ask whether the borrower suffered a personal loss. Following the High Court judgment in R (on the application of Bluefin Insurance Services) v Financial Ombudsman Service Ltd, FOS must look at the subject matter of the complaint and the underlying purpose of the borrowing — and consider whether it is connected with a trade, business, craft or profession.
A Start Up Loan is explicitly designed to fund the start or growth of a business. If your loan was taken for that purpose — whether your business was a limited company or otherwise — FOS may find that your complaint is connected with your business activity and that you are therefore not acting as a "consumer" under the DISP definition.
Important: The fact that a loan is regulated by the Consumer Credit Act 1974 does not automatically mean the borrower is a "consumer" under FOS eligibility rules. These are separate frameworks with different definitions.
The critical distinction: limited company vs sole trader
Not every Start Up Loan borrower is in the same position in relation to FOS jurisdiction. The structure of your business matters significantly.
Sole trader borrowers
A sole trader may potentially qualify as an eligible complainant as a micro-enterprise — a separate DISP category that covers persons engaged in economic activity, including self-employed individuals. If this applies to you, FOS may be able to investigate your complaint.
Limited company borrowers
If you borrowed to fund a limited company, the position is different. Your company is engaged in economic activity — but your company is not the borrower and cannot complain about the loan. You, the individual, are the borrower. And you, borrowing for a business purpose, are unlikely to qualify as either a consumer or a micro-enterprise.
GC Business Finance arranges Start Up Loans both for sole traders and for individuals funding limited companies. FOS jurisdiction decisions may therefore reach different conclusions depending on which applies to you — and a decision that went in favour of one type of borrower is not necessarily a precedent for the other.
The difference between "right to refer" and "FOS being able to investigate"
Right to refer
You can technically submit any complaint to FOS. There is nothing stopping you from sending in a complaint form. FOS will acknowledge it and open a case reference.
Ability to investigate
Whether FOS can actually consider and rule on your complaint is a separate question. FOS must first assess whether it has jurisdiction. If it decides it does not, it will issue a jurisdiction decision and close the case without investigating the merits.
This means a borrower can complain to their lender, wait up to 8 weeks for a Final Response Letter, refer the matter to FOS — and only then receive a jurisdiction decision saying FOS cannot consider the complaint. This process can take many months and the jurisdiction refusal can come as a serious blow, particularly for borrowers who had been told throughout that FOS was available to them.
Why unpublished jurisdiction decisions matter
FOS routinely publishes its decisions where it has ruled on the merits of a complaint. It does not routinely publish jurisdiction decisions — cases where it decided it could not consider the complaint at all.
This means you are unlikely to find published FOS decisions explaining why Start Up Loan complaints for limited company borrowers fall outside jurisdiction. The absence of such decisions on the FOS website does not mean those decisions do not exist. FOS has confirmed that similar decisions have been issued but not published.
This matters because borrowers researching their position may search the FOS website, find decisions that went in favour of other GC Business Finance customers, and reasonably — but potentially incorrectly — conclude that FOS will be able to help them.
If you were told your loan was covered by FOS — whether by a delivery partner, in written material, or in the complaints process itself — that may be a separate complaint ground. Directing a borrower to a redress route that then turns out to be unavailable raises legitimate questions about the quality of information provided. See the section below on GC's complaints policy.
What GC Business Finance's own complaints policy says
GC Business Finance publish a complaints policy on their website. It states:
"you will have the right to refer the matter to the Financial Ombudsman Service (FOS) within six months from the date of our Final Response letter, or you may lose that right."
— GC Business Finance complaints policy, businessfinance.growthco.uk
This statement is presented to all borrowers, across all products, without qualification.
The difficulty is this: GC Business Finance offer a range of loan products. Some of these — such as loans to sole traders — may genuinely fall within FOS jurisdiction, because the borrower is acting as a consumer rather than wholly for business purposes. For those products, pointing borrowers to FOS is accurate.
Start Up Loans are different. They are specifically designed to fund the start or growth of a business. A borrower who took out a Start Up Loan for business purposes in their personal name may not be an eligible complainant under FCA DISP rules — and FOS may therefore decline jurisdiction when they try to use the route they were told was available to them.
The result: A complaints policy that is accurate for a minority of GC's products, but which may create a false impression of available redress for the majority — Start Up Loan borrowers — who read the same policy and reasonably assume it applies to them.
Why GC is required to direct borrowers to FOS — and why that doesn't help
There is an important reason why GC's complaints policy mentions FOS even in cases where FOS may not be able to investigate. FCA rules require that if a regulated firm has any doubt whatsoever about whether a person is eligible to complain to FOS, it must treat that person as an eligible complainant. It is then for FOS to decide whether the person is in fact eligible.
In other words: a firm is not allowed to make that eligibility call unilaterally. If there is any doubt, they must send borrowers to FOS. This explains the blanket wording in GC's complaints policy.
This is not the same as GC telling you FOS can help you. GC telling you that you have the right to refer your complaint to FOS does not mean FOS has jurisdiction over your case. The eligibility decision belongs to FOS alone — and FOS may subsequently decide it cannot investigate.
A Start Up Loan borrower who complains, receives a Final Response Letter directing them to FOS, spends months going through that process, and then receives a jurisdiction refusal — was not given a clear picture of their actual options at the outset. The FCA's rule requiring firms to default to treating borrowers as eligible has a reasonable purpose; its practical effect, combined with FOS's limited jurisdiction, is that borrowers are sent on a lengthy process that may end without any investigation of the merits of their case.
This is not the same as saying the loan was mis-sold. But a borrower directed to a redress route that is then unavailable to them — particularly without any caveat about the business purpose distinction — has a legitimate basis to raise this as a separate complaint ground about the quality of information provided.
What this means in practice
Delivery partners operating in the Start Up Loans programme are FCA-regulated. They are required to understand their obligations under FCA DISP rules. The distinction between which of their products is FOS-eligible and which is not is not an obscure technicality — it is a fundamental aspect of the regulatory framework they operate within.
If a borrower was not told at the point of signing — or in the complaints process — that their access to FOS was uncertain or potentially unavailable for this specific product, this raises questions about whether full and transparent information was provided under Consumer Duty obligations.
If you received a Final Response Letter directing you to FOS, and FOS subsequently declined jurisdiction: document this carefully. The sequence of events — told FOS is available, FOS says it is not — may itself form part of a legitimate complaint about the information you were given. Use the formal complaint template to raise this.
What to do if FOS has declined jurisdiction on your complaint
If FOS has issued a jurisdiction decision saying it cannot investigate your complaint, this is not necessarily the end of the road.
- Read the jurisdiction decision carefully. FOS should explain its reasoning. If you believe the facts of your case are different from how they have been described — for example, if the loan had a significant personal element, or if circumstances changed after the loan was taken out — you can challenge the jurisdiction decision.
- Consider whether you were given misleading information about FOS coverage. If you were told at any point that FOS would cover your loan, document this carefully. It may be a separate complaint ground.
- Submit a Subject Access Request to obtain all records, including any notes about how the product was explained to you during the application.
- Pursue the lender's formal complaints process regardless of FOS jurisdiction. The lender's Final Response Letter is still a legal document and a step in any subsequent escalation.
- Consider other routes. See Your Routes If Things Go Wrong for alternatives including small claims, FCA oversight complaints, and MP escalation.