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Apfa calls for FOS to charge claims firms for bringing complaints

Apfa has called on the Financial Ombudsman Service to charge a fee to all claims management firms when they submit a claim.

In its response to FOS’s annual plan and budget for 2014/15, published last month, Apfa says it welcomes proposals to keep the levy, standard case fee and number of free cases at the same levels as for 2013/14.

But Apfa director general Chris Hannant says it wants FOS to change the rules so that all claims firms contribute “a fair share” to the provision of the ombudsman and to deter “frivolous” claims. 

He says: “Claims firms make substantial amounts of money from what should be a free service to consumers.

“Therefore, we think they should be obliged to make some contribution to the cost of that service, rather than it being borne in full by the financial services industry. Introducing a fee should also encourage a more careful validation process before claims are submitted, rather than the scattergun approach we’re hearing about now.”

He adds: “It will discourage frivolous and in some cases fraudulent claims, and ensure the cost burden is allocated appropriately.”

In its 2014/15 plan and budget, the FOS says it will no longer charge firms an extra £350 for payment protection insurance claims, and will keep the industry levy at its current level of £23.3m.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. An excellent idea. However I’m not sure that FOS wants to limit claims, after all more claims means more jobs & bigger salaries & more hierarchy.

  2. As the uphold statistics demonstrate there are many more cases at FOS because they have been wrongly rejected by lenders than there are frivolous claims by CMC’s. Until the FCA clamp down on the embarrassingly poor levels of complaint handling by many sellers (predominantly major banks / card providers) this will continue.

    My solution would be a massive hike in the FOS case fee – say to £2,500 – to be paid by the losing party on case completion. Payment on completion means that neither party is priced out of bringing or defending a claim and the increased fees could be used to ensure that all FOS adjudicators can be trained to a minimum of diploma standard. In addition part of the fee could be remitted to the winning party to compensate them for the costs of preparing their case.

    There could be a fee waiver for consumers bringing their own complaints to ensure there is no consumer detriment.

    Perhaps this would improve confidence in complaint handling and drive up standards across the industry

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