The Financial Ombudsman Service is proposing to increase the number of free cases that firms are allowed before having to pay a case fee from three to 25 per year. Currently firms that have four or more complaints referred to the FOS over the course of a year have to pay a case fee of £500 to the FOS.
Under proposals due to be published in the near future, the FOS is consulting on increasing the number of free cases so that firms with 25 complaints or less referred to the FOS during the year would not incur a case fee. If agreed, the new case fee structure would be introduced from April 2013.
The FOS calculates this proposal would result in just 1 per cent of businesses paying any case fees. It is also consulting on developing a new group account arrangement for the ten financial services groups that account for over 70 per cent of the FOS’ complaints workload. The move is an attempt to reflect the total cost to the FOS of the work generated by each company.
The FOS is also set to publish a consultation on its annual plan and budget for 2012/13. It plans to freeze both the case fee at £500 and the industry levy for the third year in a row. However, although the FOS froze the industry levy last year, last March the FSA approved a £25m industry levy increase to allow the FOS to boost its reserves to cope with the deluge of Payment Protection Insurance complaints.
PPI complaints are expected to make up half of the FOS’ workload over the next financial year. As a result the FOS is consulting on plans to charge businesses a supplementary case fee of £350 for each PPI mis-selling case referred to the FOS. The supplementary fee will be charged where businesses have more than 25 PPI complaints.
Sally Bowyer, Managing Director of leading financial claims company, BrunelFranklin.com said: “Whilst the rules have been tightened up to prevent the blanket mis-selling of PPI, in theory, the problem is historical and people can often apply for a refund of several years’ worth of premiums plus interest, if they were mis-sold a PPI policy.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.