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FOS ups case fee to £650 in levy overhaul

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  • 16/12/2019
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FOS ups case fee to £650 in levy overhaul
The Financial Ombudsman Service (FOS) has said it will move ahead with new funding proposals including raising the individual case fee to £650 in the next financial year.

 

 

The body proposed a new funding structure in a consultation in July 2019, but at the time said the case fee would stay at £550.

The ombudsman has faced the challenge of restructuring its funding as the payment protection insurance (PPI) scandal draws to a close. The deadline for outstanding PPI claims was August 2019.

FOS’s July proposal outlined a new income split of 50 per cent case fee and 50 per cent levy — a significant shift from the current 85 per cent case fee and 15 per cent levy.

However, in it’s latest consultation, FOS has budgeted for a transitionary step of 60 per cent case fee and 40 per cent levy for 2020-21.

The budget also established the number of free cases available to firms, matching the figures published in July. 

The number of free cases was 10 for firms outside the group account fee arrangement. It was 50 for the eight firms within the group fee arrangement.

The new individual case fee of £650 will apply from 1 April 2020 regardless of when the case was referred. 

The FOS said one in ten firms receiving complaints against them will pay no case fees.

 

Complaints outlook

FOS expected to receive 245,000 complaints during 2020-21, down 20 per cent on 2019-20.

Of these, 100,000 would be PPI complaints, down 30 per cent year-on-year. Other product and services would account for 145,000, down 12 per cent. 

The organisation foresaw resolving 290,000 complaints, of which 125,000 would be PPI and 165,000 other products and services.

 

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