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FOS to boost staff by a third as costs soar

The Financial Ombudsman Service is planning to boost its staff numbers from 1,890 to 2,545 over the next year, as its forecasts a 75 per cent hike in its operating costs.

The FOS published its annual consultation on its plan and budget for 2012/13 today.

It reveals the FOS’ plans to increase staff numbers by 35 per cent with the recruitment of an additional 655 staff during the course of the financial year.

The number of ombudsmen is set to increase from 90 to 125, while the number of frontline customer contact staff will go from 150 to 220.

Those working in casework divisions, including adjudicators, will increase from 1,490 to 2,000, and support staff will rise from 150 to 200.

The FOS has seen a surge in the number of payment protection insurance complaints, which it expects to continue over the next year.

At the same it has experienced significantly higher levels of staff turnover, as banks poached FOS contractors to handle their own 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 as a result of this have added to our recruitment and operational challenges.”

Over 80 per cent of FOS costs relate to staffing. In 2012/13 staffing costs are expected to total £149.4m.

The overall FOS budget is set to jump 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 £500 case fee is charged to businesses on the fourth and any subsequent case referred to the FOS during the year.

The FOS has frozen both the £500 case fee and the industry levy for the third year in a row. However it says given the expected rising costs and inflationary pressures it is likely case fees will increase from 2012/13.

Separately, the FOS is also consulting on whether to make radical changes to its case fee structure which would see the “free case” limit increase from three to 25 per year from April 2013.

Network members will continue to be liable for case fees as the free cases will apply to the network as a whole.

For the 10 financial groups that make up over 70 per cent of the FOS’ workload, the ombudsman is proposing a new group account arrangement to align costs with the firms that generate the most complaints.

Table on forecasted number of FOS staff taken from FOS plan and budget for 2012/13:

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Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. Scandalous, truly scandalous!

  2. Paul Standerwick 6th January 2012 at 1:32 pm

    75%!!!! lost for words………

  3. 2,545 Staff????!!!!

    Yet more fees to fund yet more over paid plonkers to sit in expensive offices in expensive locations playing with themselves and spewing out meaningless drivel!

    If the other set of idiots at Canary Wharf weren’t asleep most of the time, the size and scope of the FSCS could be halved rather than doubled.

    This is SO, SO, SO, depressing.

    Must go, I’ve got to find something to kick!

  4. The FSA and FOS etc., must hit those that cause the biggest problems with the biggest fees. We are only a small IFA, but never have received a complaint or been involved with Key Data, Lehmans etc. so why should I contibute to their failures and to those companies who go belly up and then reincarnate themselves under a new name. Hang on, this strikes a cord, the FSA are doing this and therefore any old failures of theirs will not be laid at their door and the overpaid top dogs keep dragging their nose in the trough.

  5. Giz a job !!!

  6. David Cowell, Myddleton Croft 6th January 2012 at 1:50 pm

    These figures mean that the average employee at the FOS receives over £80,000 pa.
    Has anyone thought of doing a cost/benefit analysis?

  7. Dennis Burling ACII APFS, Chartered Financial Plan 6th January 2012 at 2:05 pm

    Yet more money down the drain from the industry to pay for even more people to put more small firms out of business – where is this going to end !

    Looks like the FOS have taken a leaf out of the FSA book, create more work for themselves, employ more people to justify bigger salaries and get the industry mugs to pay for it all !!

    What a gravy train !!

  8. So a 35% increase in staffing results in 75% increase in costs. Sounds as if some large bonuses are being allowed for. Glad I’m retiring at the end of the year.

  9. “..as its forecasts a 75 per cent hike in its operating costs”

    I’m appalled by this. They are taking the proverbial!

    I’m going to apply for a job with them.

  10. Surely there is somethong wrong with this industry? Why cant we get our MP’s etc involved? What benefit the MAS serve? With so much regulation, if the FOS is being beefed up, there is some problem? This country is doomed, if we do not wake up. The FSA has slowed down the housing market, the economy is being hurt, banks are in a crisis, Advisers are being put out of business, the FOS is creating more jobs to be paid by whom? God Help us!

  11. From the Careers section of the FOS website

    job title
    team manager
    reports to
    head of casework teams
    location
    London docklands
    salary
    starting salary
    £40,000 plus excellent benefits and a non-contributory money-purchase pension.
    aiming high
    For really outstanding performance, and as your skills and knowledge develop, your salary as a team manager could rise to £58,750.

    ..and now for the cherry on the top

    We don’t necessarily require knowledge of any particular aspect of financial services to do this job – as you’ll be supported by experts in the area in question and given a lot of training. However, if you do know an area of financial services well, we’d welcome your expertise

  12. I can categorically state that I will finish in this business before RDR takes effect.

    One things for certain I’ll be applying to the FOS for a position.

  13. I was talking to a claims management firm Principle yesterday and asked what he will be doing once the PPI claimed have run dry. He said they are filling their boots but the big money and where their focus is now changing to is post 2004 mortgage sales for;
    RTB’s, affordability and where properties have been repossessed.
    Self cert where income could have been proved and was not obtained.
    Excessive broker fees £1000 plus ( they ask for rebate as cheaper than £500 FOS).
    Fast Track mortgages where pay slips and bank statements were available but not used!!.
    Self employed mortgages where income was not properly verified.
    ALL mortgages which are in arrears…….they will go “fishing” for a Miss-sold mortgage to obtain compensation.
    ALL Mortgages that go into retirement to justify affordability was taken into account at outset!
    And
    Whole of Life policies on reviewable terms.
    Personal pension transfers, analysis, commission RYI
    What they are doing is contacting all their clients that have has a successful claim so far and introducing new scenarios for them to claim.
    To ALL sole traders go LTD now, you don’t know how far this madness will go but either way IFA’s and Mortgage brokers will be the ones to pick up the bill. Either way, right or wrong we pay.

  14. So how does a 1/3rd increase in staff numbers equate to a 75% increase in costs – when the bulk of their costs is staffing?

    Does everyone get a massive payrise?

    Also – what happens when the PPI ‘bulge’ is dealt with?

    Massive redundancy payments all round I guess!

    Can they actually look more than 12 months into the future please!!!!!

  15. Andy @ 3.34

    Crikey that’s a happy thought for 2012! I am now contemplating leaping into the pond outside our office. Only 3 feet deep mind, so more of a gesture than anything.

  16. At this rate there will soon be more regulators than firms, imagine a flock of vultures picking the bones of the last carcass.

    What happens then?

  17. It’s good in here boys, you should come and Join, I haven’t even passed a CF exam let alone Diploma and I’m sitting here on 40k plus, just had to show a bit of graft with casework to begin with, it’s almost like the public sector it’s not our money so we don’t care we spend it as we like, almost like a quango I guess… Anyway must go this Flexitime means the bell has gone for me to knock off at 4.pm on Friday and not back til 10am Monday….. this is the life

  18. What a load of whinge bags. Surely you guys are too busy to be writing this drivel.

    Concentrate on having a good client offer, look after your clients, be complient and trustworthy and shout about it. The government who ever they are will never get it right, muppets will always rule and legislation is and has always been a gravy train for those at the top in power.

    Start a petition and get 100K signatures to ask why the FSA fails on a regular basis, IFA’s rip people off and what RDR will do to stop this and the muppets at the FOS never really do a good job, they are just pen pushers.

    Come on start a revloution

  19. For starters, there wouldn’t be a tenth as many claims on the issue of MPPI mis-selling if the FSA had got up off its loathsome, spotty behind and taken steps to prevent it from reaching epidemic proportions. So much for the FSA’s statutory responsibilities for consumer protection.

    Secondly, no one has yet explained just why the MoJ, as opposed to the FSA, is responsible for the regulation of claims instigation companies. Since when was the MoJ a regulatory body?

    Apart from that, my dealings with the FOS as it is leave me deeply unimpressed. We have today received a verdict on a CPA case on which the provider resoundingly screwed up and admitted so doing, causing a delay of something like six weeks in the client’s pension being set up. We demanded compensation to the client for the delay.

    The FOS declared that because the provider had honoured its originally quoted annuity rate, the client was “better off” than if the rate applicable at the late starting date had been used, so the provider should not be held liable to pay any compensation.

    Hang on a minute ~ the annuity rate that might have been applied at the late kick-off date doesn’t come into it. The only reason it might have done is because the provider, by its own admission, had failed to set up the annuity in a timely manner. A lower rate shouldn’t have been applied UNDER ANY CIRCUMSTANCES. The complaint was about late set up, not a fall in the applied annuity rate. On what possible grounds could the provider have applied the lower rate?

    The FOS has rejected the complaint on completely the wrong criterion, suggesting that the provider has done the client some sort of favour by adhering to the original annuity rate which, IMO, it was duty bound to honour anyway. Bloody hopeless.

  20. Surely the ever escalating size and cost means that regulation is not working?

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