The Association of British Insurers has called on the Financial Ombudsman Service to look at ways for claim management firms to contribute to FOS funding.
The FOS is currently funded by industry levies and case fees paid by the business that is the subject of a complaint.
A firm does not have to pay a case fee for the first three cases during the year. For the fourth and each subsequent complaint, a firm has to pay a £500 case fee.
In the FOS’s annual consultation on its plan and budget for 2011/12, published in January, the FOS says it plans to freeze the case fee and industry levy for the second year running. But it warns it may need to increase reserves because it is concerned about lost case fee income pending the outcome of the judicial review brought by the British Bankers’ Association into payment protection insurance.
In its consultation response, the ABI says it supports the FOS’s plan to freeze the basic levy and case fee. But the trade body adds: “The FOS should also explore other ways of reducing costs for firms, including options for claims management companies to contribute to funding.”
Plan Money director Peter Chadborn believes it would make sense for claim management firms to pay towards the cost of the FOS.
He says: “Surely it is not beyond the wit of the number crunchers to identify what percentage of claims come via claim management companies and what percentage come from the consumer.
“Many people will testify to the fact that claim management firms aggressively market their wares on the basis that the customer has got nothing to lose.”