TSC calls for FOS to calculate costs
The Treasury select committee has asked the Financial Ombudsman Service to calculate the total compliance cost of the scheme for firms after it was unable to give the details to MPs.
In an evidence session last week, the committee asked FOS chief executive Natalie Ceeney how much the service costs the firms it interacts with. She was unable to provide an answer.
Committee chairman and MP for Chichester Andrew Tyrie said: “Can I suggest you start to gather that information because it strikes me that what we really need to know if we are to work out whether you are providing value for money as a service is what the cost is of the total compliance burden.”
Ceeney said the average cost of a case is around £600 but that figure varies widely and does not take into account costs to the industry. She said the industry saves money by dealing with the FOS instead of the courts.
FOS principle ombudsman Tony Boorman was asked if a small consumer contribution would cut the number of frivolous cases. He said it would but it could also deter some consu-mers with genuine grievances.
Boorman said: “We receive one million enquiries a year and we take on 200,000 of those, so it is very clear that what we should be doing is rejecting frivolous cases.”