Staff numbers at the Financial Ombudsman Service are to rise by a third and it is having to cope with banks poaching adjudicators to deal with their payment protection insurance complaints.
The FOS plans to boost staff numbers by 35 per cent over the next year from 1,890 to 2,545.
It has seen a surge in PPI complaints while experiencing significantly higher levels of staff turnover, as banks lured FOS contractors with higher pay packages to handle PPI complaints.
The FOS says: “We have found it challenging to compete against the remuneration packages offered by some of those businesses.
“The higher levels of adjudicator turnover during 2011/12 have added to our recruitment and operational challenges.”
In 2012/13, staffing costs are expected to total £149.4m. Overall, the FOS budget is set to leap by 75 per cent from £113.1m for 2011/12 to £197.6m for 2012/13.
The FOS is funded by a mixture of case fees and an industry levy. The ombudsman has frozen the case fee and the industry levy for the third year in a row but says given expected rising costs and inflationary pressures, it is likely that case fees will rise from 2012/13.