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The Financial Ombudsman Service (FOS) is been urged to consider charging a case fee before the complaint has been resolved and closed, as part of a drive for better efficiency.
A review by the National Audit Office (NAO), published today, said this was one way the organisation could meet the "highly volatile" demand it will continue to face over the coming years.
It pointed out the FOS has seen a 376% growth in number of cases it has had to handle since 2001/2, while it has also experienced a 214% increase in operating costs over the same timescale.
The NAO said the service should "develop a more complete understanding of the factors that are driving its unit costs so that it can begin to address the causes of the increases it has experienced".
Among the key recommendations was that it "evaluate whether its current charging regime is still fit for purpose, and consider charging firms upon case conversion rather than at case closure".
Other recommendations included doing more to quantify the impact of the complexity of cases on unit costs, better understanding the maximum number of cases staff can work on at any one time, and more staff engagement.
Sir Christopher Kelly, chairman of the FOS, said: "As the review concludes, the biggest challenge we face is in dealing with demand that's highly volatile and difficult to predict - while continuing to provide a service that's efficient and value for money, as well as responsive to the needs of our users and stakeholders.
"We're currently consulting on how to gear up to be ready to deal with a further substantial increase in our workload next year - as a result of the rising volumes of payment protection insurance complaints and the impact of the tough economic times on consumers and businesses alike."
The FOS is currently consulting on new charging structures and one of the proposals is to increase the number of free cases for small businesses from three annually to as many as 25.
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FOS charges
Surely it is the complainant that should be charged a fee which may cut down on the spurious complaints being raised.
Posted by: Steve Baker
Complaints
The 'COMPLAINTS FACTORY' needs more money.
Posted by: Incompetent Regulators Award Team
Fees
I think professional claims firms should pay the FOS fees upfront and individual claimants should be warned that they will also have to pay the FOS fee if they lie in the process of the claim or if the claim is spurious. I don't mind footing the bill for genuine claimants, but not for spurious claims or fishing trips for claims companies.
Posted by: MarkG
FOS
As clients become more aware of the fact we have to pay £500 even when we have done nothing wrong and done our jobs perfectly well, of course the complaints level will increase, clients have us over a barrel for smaller matters of complaint i.e. less than £500. e.g. If a client asks for a refund of broker fee say £300 or they will take the complaint to FOS; (no matter how ridiculous the complaint is) it’s more cost effective to just buckle and refund the fee than have the complaint refuted by FOS and have to pay £500 to be told you did your job well, where’s the justice in that?
Posted by: Steve
FOS Charges
I think that the general public would think twice about making a doubious complaint if they were charged a fee upfront, refundable if they were successful of course. Perhaps the broker and client should both be charged a fee upfront and as well as the party the ombudsmen find in favour of getting their fee refunded, they receive part of the fee left to cover their costs with the ombudsmen getting the rest?
Posted by: Mark Sutton
Charges
It should remain free but the FOS should be empowered to charge either the claimant OR their appointed adviser in the event of the claim being viewed as frivolous or contrived. Make any claimant sign to acknowledge that the information provided is correct and false statments may be subject to legal action.Ban fee payments to advisers who are not notified on the submission of the claim and hey presto a good free service for people who have been wronged. Besides you could not charge a fee for the shambolic service that is currently on offer to the public
Posted by: Dave Bettley
Complaints Compan
It is interesting today the comments regarding the complaints that are being received following road accidents and the payments being made for 'whiplash'. These are being instigated by the claims farmers and it looks like the government is going to take action. It would be interesting for them to take the same action on the same companies that farm for complaints in the financial services industry as a whole rather than focussing on one aspect which grabs the headlines.
Posted by: Bob Donaldson
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Good idea
This seems an excellent idea. I think we should all complete a direct debit and just let them take what they want, when they want it. Same with the FSCS. We know it makes sense!
Posted by: David