FOS sounds out warning - Papers 15th Dec

THE FINANCIAL OMBUDSMAN SERVICE (FOS) says it will not be able to cope with the expected increase in mortgage endowment complaints in 2005, unless steps are taken to force providers to settle cases themselves, the Telegraph says.

Endowment complaints are expected to skyrocket next year because some of the biggest providers will send off letters notifying policyholders of the three-year time-bar rule.

According to the Telegraph, under this rule, policyholders have just three years from receipt of the first warning letter to complain. Thousands of customers will discover they have a matter of months to put forward their claims for compensation.

Walter Merricks, the ombudsman, has become increasingly fedup with endowment providers who continue to flout complaint handling guidelines, despite warnings from the Financial Services Authority (FSA).

Halifax and Abbey National are understood to be among the names passed to the FSA by the FOS over shortcomings on complaint handling.

EMPLOYERS face an additional bill of 16p for every litre of petrol used by staff as an EU ruling will decide whether Britiain is required to end the fuel tax rebate, says the Times newspaper.

Any change in the law will hit small businesses most, but the European Court of Justice is going to rule on whether a British law allowing employers to deduct VAT on fuel is compatible with EU treaties.

The EU argues situations where employees pay for petrol and charge it to expenses breaks a basic principle of VAT law because even though the employer is not making the purchase themselves, they are still paying.