The Financial Ombudsman Service has come under fire for offering its staff bonuses for completing cases quickly.
In an interview with Radio 4 programme Money Box, chief financial ombudsman Walter Merricks confirmed that staff get a bonus if they meet and exceed targets for closing cases.
He denies that this encourages a bonus culture but reveals that staff are paid extra as part of the remuneration and performance structure of the organisation.
The programme examines whether the increased workload, caused mainly by higher than expected numbers of complaints, is having a major effect on the FOS when it comes to how it judges what is fair and what is not. It also looks at whether the Treasury should bring in an appeals' process for financial firms.
Merricks said many of the 600 adjudicators come from financial services backgrounds and are used to the idea of targets. He said the organisation feels it is not unreasonable to reward them for achieving and exceeding these targets.
FOS chairwoman Sue Slipman has admitted that the FOS is under great pressure to keep up with demand following a 57 per cent increase in its workload this year to 98,000 cases.
Consumers' Association senior policy adviser Mick McAteer says: “Clearly, we would prefer that the ombudsman did not have to use this particular target and bonus system. It would be much better if the staff and the ombudsman had sufficient resources and staff were well paid enough not to have to rely on bonuses and targets to boost their salaries.”
FOS spokeswoman Alison Hoyland says: “This is not a question of compromising quality for quantity. We see this as a fair way of remunerating employees but it is not a new thing. We have many checks and controls in place and if any issues of quality arise they are taken very seriously.”