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FOS adds extra £3m to budget

FOS chief executive Natalie Ceeney
FOS chief executive Natalie Ceeney

The Financial Ombudsman Service has added an additional £3m to its final annual budget for 2013/14 since it consulted in January, bringing the total to £283.6m.

The figure represents a 93 per cent increase on this year’s £147.2m budget.

The FOS published its final plan and budget for 2013/14 yesterday, following the consultation in January. It initially set its budget at £280.1m, but has now approved a final budget of £283.6m.

The FOS is funded by a combination of case fees, which currently firms have to pay if they have four or more complaints referred to the FOS within a year, and a compulsory levy imposed on all financial services firms. The FOS is also currently charging a £350 supplementary case fee for payment protection insurance complaints.

Most of the cost burden for 2013/14 will fall on the largest firms like banks, which from April will pay a new quarterly group account fee, rather than a standard case fee.

Standard case fees for other firms will increase from £500 to £550, and the number of free cases from three to 25. Both measures will be introduced in April.

The difference in the budget from January compared to the final budget was driven by lower than expected income from case fees and supplementary case fees.

The FOS has also confirmed the levy on financial services firms will go up 30 per cent from £17.7m to £23m.

A FOS spokeswoman says: “The increase in the budget has come from the changes we are making to our payment model and a slight adjustment to the amounts we are likely to see coming in under that model.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. “The FOS has also confirmed the levy on financial services firms will go up 30 per cent from £17.7m to £23m”

    Have these people no shame, 30% rise in levies is legalised robbery. I wouldn’t mind if the level was to fund compensation, it is not, it is just support another unaccountable, unapologetic gravy train legalised robbers dipping their hands into our pockets.

    Is it any wonder adviser numbers are reducing at an alarming rate, soon there won’t be anyone left to fund this ludicrous waste of money.

    I used to think that FOS was inherently fair but this is not fair, it is not reasonable and it is an obscene burden on the industry and practitioners in a time of economic downturn and uncertain prospects for growth.

    Just another back door tax !!!!.

    And the FSA is seeking to control fee levels for advisers when this sort of profligate spending goes on within the regulatory bodies!

    It makes me want to spit vile and obscene comment, instead, me being a gentleman I will revert to the time honoured method of dealing with this situation.

    No further comment

  2. RegulatorSaurusRex 21st March 2013 at 12:50 pm

    Dear Mr Naylor

    Don’t you have anything better to do with your time?

  3. Just wait until the SIPP complaints start arriving and you will see another increase along with compensation payments…… Resulting in less IFA’s and greater fees for the remaining

  4. Wow, that’s quite a rise in the FOS’s turnover, if only that could find its way into the government’s growth figures just imagine what that might do for the economy. It could be the new growth model.

    I wonder if it can be shorted somehow?

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