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corporate plans and budgets » Plan & Budget 2002/03 - Tariff and case fee information

‘this is the first year that the Financial Ombudsman Service will be collecting the levy directly from firms’


9.1 This is the first year that the Financial Ombudsman Service will be collecting the levy directly from firms. As agreed during the consultation on the fee raising rules, 50% of the costs will be raised by a levy on firms and 50% by case fees. The total budget is therefore divided into two amounts of £14.1m.

general levy

9.2 The tariff rates in appendix A are for information only. They are presently part of a FSA consultation document (CP119) and any comments should be sent to the FSA by 21 February 2002.

9.3 Financial services firms are grouped in a total of 15 different industry blocks, based on provisional data provided by the FSA. The levy has been apportioned across these blocks, according to the number of case-handling staff assigned to deal with cases that fall in each relevant block. During the consultation period we intend continually to refine our fee data which may give rise to a change, perhaps materially, in the tariff rates.

9.4 As mentioned in the policy document, Dispute Resolution: the Complaints Sourcebook, we intend to send out estimated invoices in March/April 2002, based on the above tariff, which we will revise in the autumn to take account of the tariff data received from the FSA.

9.5 In addition to the annual budget of £28.2m, we intend to recover one third of our £4.9m establishment costs. Establishment costs will be collected from firms over a three-year period until 2004/05 (£1.63m per annum) and will be charged in proportion to the general levy. These rates are also subject to consultation in CP119 as above.

case fee

9.6 The case fee will be the total to be raised divided by the number of expected case closures. Our current estimate is £360 (see appendix B), made up of £344 (50% of the unit cost) plus £10 for interest and £6 to cover contingencies such as bad debts.

9.7 We have also provided details of our proposed tariff rates for the Voluntary Jurisdiction (appendix C). Where there is a direct comparison, such as in the banking and loans block or general insurance, we will use the same rate as for the Compulsory Jurisdiction. In other cases we will use an appropriate factor. The Voluntary Jurisdiction blocks are at present limited to: firms that were members of a predecessor scheme on 30 November 2001, but which are not regulated by the FSA for events from 1 December 2001 onwards (the activities covered are the same as those covered by the predecessor schemes); mortgage lenders that are not currently regulated by the FSA for complaints about events before or after 1 December 2001 (but limited to lending money secured by a charge on land, plus any ancillary advice and services); and certain non-UK financial services companies based in the EEA but trading in the UK.


9.8 The methodology for charging our levy and case fees has been the subject of thorough consultation. However, we are committed to consulting each year on the method of determining the tariff, the tariff rates and our case fee.