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FOS confirms levy freeze for 2012/13

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  • 27/03/2012
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FOS confirms levy freeze for 2012/13
The Financial Ombudsman Service (FOS) has set its budget for 2012/3 at £191.1m, meaning both the case fee and total levy will be frozen for the third year running.

Advisers will continue to be charged the standard case fee at £500 for the third year.

The FOS’s projected budget for 2012/13 is more than £6m short of its expected costs for the forthcoming year, but this is covered by a £6.6m budget surplus in 2011/12.

The overall levy for the “compulsory jurisdiction” has been set at £17.7m, with the levies for the “consumer credit jurisdiction” and “voluntary jurisdictions” at a combined £2m.

The Ombudsman also announced firms caught in the PPI mis-selling scandal would face a supplementary case fee of £350, above the first 25 cases per year.

Of the 260,000 cases FOS expects to resolve during the year, around 130,000 will relate to PPI.

The Ombudsman said the break was due to the “unprecedented volumes of PPI complaints”, with the “industrialisation” of PPI complaints-handling across the financial services sector. The expected cost of a single PPI complaint is around £760.

“This higher cost – which the supplementary case fee of £350 is intended to bridge – reflects a number of factors unique to cases involving mis-sold PPI,” the Ombudsman said.

“In particular, we are managing our unprecedented PPI caseload as a single unit, which involves significant up-front costs – including the acquisition of new premises, and the development of new operational processes.

“The recruitment and training of large numbers of new staff will be a particularly significant cost in relation to PPI in 2012/3.”

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