The Financial Ombudsman Service (FOS) is to make further cuts to its operating budget in the coming financial year and has frozen its levy at £23.3m.
Its proposed Plan and budget for the next financial year (2015/2016), released on 6 January, said the organisation will reduce its operating budget from £253.7m to £220.7m.
It said this would result in a 13% cost saving to the financial services sector, which funds the service via levies and case fees.
The overall compulsory levy on the industry will remain at £23.3m in 2015-2016.
It also said it intends to recruit an additional 200 adjudicators and ombudsmen.
It said it would continue to freeze the case fee paid by businesses at £550, payable only after the 25th case. It said this means 99% of businesses will continue to pay no case fee at all.
The consultation paper added it would continue the group-account charging arrangement for the eight largest businesses that generate the most complaints, “resulting in three-quarters of our expected workload being funded on this more financially stable basis”.
Disputes
In the coming year the FOS aims to answer 1.4 million front-line consumer enquiries and resolve a further 250,000 disputes involving mis-sold payment protection insurance (PPI) – reducing the number of existing PPI cases from around 280,000 to 180,000.
It also predicts it will tackle tackle 88,000 banking complaints, 33,000 insurance cases and 17,000 investment complaints.
Chief ombudsman Caroline Wayman (pictured) said: “Over the last few years the ombudsman’s workload has increased substantially – and the volatility of complaint levels remains a significant challenge when planning for the future.
“But we’re finally seeing evidence that the number of complaints referred to us by consumers is starting to stabilise.”
She added: “On the other hand, complaints about PPI are still the main driver of financial disputes. And although numbers are slowly declining, it will be years before we can truly say this mis-selling scandal is over.
“Our plans take into account the increasingly hard-fought and complex nature of the cases we are seeing – not only in PPI but also in areas like mortgages and pensions.
“No two financial complaints are alike. So from payday loans to pension drawdowns, our principal focus this year continues to be on placing fairness at the heart of what we do.
"Giving people honest, thoughtful answers that help them better understand and make sense of things that have gone wrong.”
The FOS was established by law to resolve unresolved individual disputes between consumers and financial businesses.
