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financial ombudsman consults on plans for resolving unprecedented number of complaints while reducing budget by 20%

9 January 2014

consultation opens on ombudsman's our plans and budget for 2014/2015

The Financial Ombudsman Service today publishes, for public consultation, its proposed plan and budget for the next financial year (2014/2015) – together with an update on numbers for the current financial year (2013/2014).

The plan and budget sets out how next year (2014/2015) the ombudsman is planning to:

  • answer 1.8 million front-line consumer enquiries;
  • resolve more disputes involving mis-sold payment protection insurance (PPI) than ever before – a record 320,000 cases (reducing the stock of PPI cases from over 400,000 to 270,000); 
  • tackle 64,000 new banking complaints and 32,000 new insurance cases as well as another 150,000 new PPI cases; and
  • reduce its budget by 20%.

 
The proposals to manage and fund this workload include:

  • no longer charging businesses the £350 supplementary case fee for PPI complaints – now the ombudsman has geared up resources sufficiently to tackle the PPI workload;
  • freezing the case fee paid by businesses at £550 – payable only after the 25th case – so that the vast majority of businesses will continue to pay no case fees;
  • maintaining the levy at its current level of £23.3m, ensuring the overall cost to the financial services industry is no more than this year; and
  • extending the group-account charging arrangement to a further four of the largest businesses – so that around three quarters of the expected workload will be paid for on this more financially stable basis by the businesses whose customers use us most.

 

Tony Boorman, interim chief executive and chief ombudsman, said:

For the last few years our focus has been on building up our capacity to meet the unprecedented challenges of PPI.

The investment we have made in scaling-up and developing our service is now paying off as we plan for another year of record activity, resolving twice as many PPI cases as we receive. But we’re not out of the PPI woods yet.

While we expect the volumes of PPI complaints to decline, the numbers are still likely to be substantial. Our plans take this into account – but we will still be relying heavily on the patience of consumers and the cooperation of businesses, before we will be able to draw a line under the PPI saga.

Across all of our work we continue to hear that people's dealings with financial businesses remain strained, suggesting a lot more work is required to restore consumer trust in financial services.


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