The Financial Ombudsman Service has confirmed its intention to increase the number of free cases firms are allowed before having to pay a case fee from three to 25 per year, but rejected calls for claims management companies to pay a fee.
Currently, firms have to pay a £500 case fee for the fourth and subsequent cases referred to the FOS over the course of a year.
The new case fee structure will be introduced from April 2013. The FOS calculates it will see just 1 per cent of businesses paying case fees.
The free case limit will apply to networks as a whole rather than each appointed representative.
Large businesses with more than 2,000 cases referred to the FOS in one year will not qualify for any free cases and will be subject to a new group account arrangement that aligns fees to the amount of cases generated.
The FOS rejected industry calls to introduce fees for CMCs submitting claims.
It says: “We do not believe it would address the underlying issues in the claims management sector, not least because the costs would ultimately be borne by consumers.”
Forty Two Wealth Management partner Alan Dick says: “CMCs should be brought into scope because they are largely responsible for the frivolous claims made.”