FOS freezes levy and case fee for 2010/11
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The Financial Ombudsman Service levy to be paid by the financial services industry in 2010/11 and the case fee have been frozen at 2009/10 levels.
According to the FOS Corporate Plan and 2010/11 Budget, published today, the industry levy will remain at £19.5m and case fees will remain stable at £500.
The number of free cases granted to firms will remain at three.
FOS says it expects a 27 per cent increase in its workload in 2010/11 to a record 210,000 closed complaints, up from 165,000 in the current financial year.
It says as a result operating costs will increase from £96.6m, forecast for 2009/10, to £113.5m in 2010/11.
This includes the cost of 300 additional casework staff needed to help resolve the expected 210,000 complaints.
Income for 2009/10 is expected to be £1.3m above budget, but expenditure is expected to be £4.3m above budget, resulting in a deficit of £2.7m rather than the budgeted surplus of £0.3m.
Despite this FOS says the minimum levy for IFAs and mortgage brokers is likely to decrease in 2010/11, subject to a separate FSA consultation.
The ombudsman’s average cost of handling a case is forecast at £587 for 2009/10 and is expected to fall by 8 per cent to £540 in 2010/11.
FOS says the substantial increase in the volume of new cases expected in 2010/11, rising to 190,000, takes account of initial forecasts from the financial services industry and reflects the continued impact of the recession.
Of the new cases it expects 85,000 banking complaints, 23,600 insurance complaints, 25,200 investment cases, 10,200 consumer credit complaints and 46,000 PPI complaints.
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Readers' comments (8)
Incompetent Regulators Awards Team | 12 Jan 2010 12:13 pm
Well what do we have then, some pretend respite from FOS's questionable fees?
This outrageous organisation needs to be investigated for it's circumvention of the law!
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Andrew Moore | 12 Jan 2010 12:25 pm
So where are all these complaints coming from? - The banks no doubt so let them pay for it.
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Sean McCabe | 12 Jan 2010 12:27 pm
Would it not be sensible to revisit the option of a complainant lodging a nominal "fee" with the FOS when complaining. This fee to be refunded should the complaint be upheld. The complainant fee need only be for a relatively small amount of say £250 (50% of case fee to us) and would I'm sure reduce the case load & costs to FOS by cutting out a lot (probably not all) of vindictive & silly complaints.
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Evan Owen | 12 Jan 2010 12:42 pm
Dear FOS
Please accept a challenge to demonstrate with clarity that your staff are capable of of making decisions which are indeed 'fair and reasonable' by using ADR.
I have a case which would be an excellent example that could be 'tried' by the IFA's peers, a panel of IFAs.
My telephone number is 0845 458 5300, please leave your contact details so that we can deal with this as a matter of urgency.
Yours faithfully
Evan Owen
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paolo standerwick | 12 Jan 2010 12:46 pm
To Sean McCabe
Sean you are too trusting and sensible. Of course in a normal fair world that would be the perfect anwer. If this was put into practice the FOS would collapse. And that's what's needed.
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peter herd | 12 Jan 2010 1:01 pm
I would agree with the comment above the Banks are back making profit and giving bad advice as 95% of the complaints come from them. So surely they should pay for the service, as IFA have a very low complaint level and do not get governement baillout money. The bailout money also give them a unfair advantage in the marketplace as they use this money to advertise their advice services as in the latest NatWest advert.
If the government wants to increase the number of IFA's surely is time that we look at the whole structure of financial services in and ban product providers from giving advice as they are really sales people and should be just product provider (RDR does not do this). While I'm on the subject of complaints another area that the FSA should look at banning the word guaranteed as when you look at complaints from Banks it is normally surrounding guaranteed investment linked to the FTSE or other index.
The other area that needs urgent attention which this website need to run more articles about is to spread and influence of players like Tesco's. Players like this will make financial services even more complicated for the general public to understand and in some respects will repeat the mistakes of the past as these providers offer products with no advice or checking that they are right for the customer.
I cannot believe that the FSA and FSO allows the likes of Tesco and Virgin to conduct 100% of its business on an execution only basis, surely IFA's need to be treated in a different way. When you look at our cost of administration compare to the likes of Tesco is operating in a execution only market in generating so many complaints and surely something has to be done is about these practices.
Government wants to see IFA is become more like accountants Solicitors but if Banks and players like Tesco's are allowed to continue with their present business plans giving so called FREE ADVICE (not) and I personally believe that there will be a further reduction of the amount of IFA's trading in the UK.
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Robert Perry | 12 Jan 2010 1:14 pm
Income is expected to be £1.3m over budget but expenditure is expected to be £4.3 m over budget leading to an anticipated deficit of £2.3m.
An extra 300 staff are to be taken on to cope with the increased number of complaints. Is it just not too easy for people to complain. How much time and money is wasted on groundless, frivilous complaints on the basis that "its not costing me anything and I might get some compo".
I fully agree with Sean that complainants should pay a fee for a compalint to be investigated.
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Olabode Ayanwuyi | 12 Jan 2010 2:34 pm
Whilst I amusually all in favour of the numerous and humerous complaints on this site, I don't think 'the usual suspects' have thought their complaints through this time.
Having experienced adjudication from other industry arbitrators (Telecommunications etc), I agree that FOS is not a 'fair' arbiter and is heavily weighted towards consumers, but we need to understand that this is largely as consumers need all the help they can get against the banks.
To expect them to treat IFAs any differently is simply unrealistic. For everyone outside of financial services, they see us (sadly) in a very similar light.
We should be focusing on distinguishing what we offer, from the pitiful offerings of the high street banks - there should be a clear distinction in the names and services provided.
I do not have an issue with the case fee. How many times have each of you had more than 3 complaints in a year? I see the fee as a levy against the banks, I just wish they could increase it and reduce the levy on the rest of us.
Charging the consumer would not work as it would stop the small proportion of consumers that complain against the bank complaining.
I know it is frustrating, but let's try and look at the bigger picture.
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