FOS Expects 16% More Complaints, Pledges Faster Service and Cost Cuts
The Financial Ombudsman Service (FOS) has revealed it expects to receive 16% more complaints than previously thought this financial year and will drop its case fee to £650.
The Ombudsman Service today published its final plans and budget detailing the next phase of its transformation, while confirming an increased caseload it expects in the upcoming financial year.
While consulting on its plans in December last year, the free resolution service estimated it would receive around 181,300 new cases in 2024/25. But following on from discussion with businesses and consumer groups this figure has since been increased to 210,000.
The Ombudsman cited several factors including everyday financial concerns such as unaffordable lending, credit card complaints and fraud and scams as well as those motor finance commission cases which are not affected by the Financial Conduct Authority’s review of historical practices coming to the Ombudsman.
The Ombudsman also maintained it has made “significant” strides in the service it offers to both consumers and businesses.
It cited a reduction in the time it takes to resolve a case from 4.8 months in 2022/23 to 2.96 months by the last three months of 2023/24. It also set itself a new target of resolving 90% of cases within six months.
FOS further committed to resolve 17% more cases in the year ahead than in 2023/24, up from 192,500 to 225,000.
It added its increased workload will be tackled partly by recruiting more case handlers. It also committed to continuing investing in the customer and business digital journey, as well as expanding its regional presence in the UK to ensure the Ombudsman is accessible to different communities.
And there was also confirmation of an intention to reduce the cost of its services to industry in 2024/25. The FOS case fee will drop by £100 per case to £650, while the compulsory and voluntary jurisdiction levy costs to businesses will also be reduced.
This will result in over an effective £60m reduction in case fee and levy costs to businesses, once inflation and increases in the number of cases are taken into account, the FOS said,
The FOS previously sought views on the possible exercising of new powers granted in the Financial Services and Markets Act, which allow the organisation to charge claims management companies and other relevant professional representatives.
Following positive feedback on the initial consultation, the Ombudsman added it intends to consult on further detail in the first quarter of this financial year.
Abby Thomas, CEO of FOS and chief ombudsman, said: “The Financial Ombudsman Service continues to make significant improvements in the service we offer, getting customers decisions more quickly while maintaining the high quality of our work.
“We will be even more ambitious next year, with plans to resolve complaints faster, while also reducing the cost of our service to businesses.
“In the year ahead it’s likely that our service will see increasing levels of complaints, with many of those disputes expected to focus on the critical issues that impact people’s everyday lives.
“This includes perceived unaffordable lending, concerns about car loan agreements, and disputes around fraud and scams.
Thomas added: “With uncertainty around casework levels in the year ahead, we’re building a service which is flexible and agile, allowing us to respond to increased demand across any area of our business.
“Our plans will help ensure that the customer is at the heart of everything we do. We want every person who engages with our service to clearly understand the outcome of their case.
“Now more than ever it’s crucial that businesses work with us to improve all customers’ experiences of financial services.”