AIFA stated in its response that it is disappointing that the number of complaints received by FOS is so high. Commenting on this issue, Chris Cummings, AIFA director general, said,
“A matter of considerable concern to us is the increasing volume of complaints being generated by Complaint Management Companies (CMCs). Evidence suggests that many complaints are being passed to FOS by CMCs without any proper investigation or due consideration being given to the final decision letters drafted by the IFA firms involved.
“It is essential that this activity is curbed to prevent the FOS forecasts being grossly underestimated and costs, which have to be met by the industry, escalating further. This is a matter of considerable concern to AIFA members and we are actively supporting the introduction of regulation for CMCs.”
In its response, AIFA highlights its support of FOS’s undertaking to review the basis on which the organisation’s funding is raised. On the issue of the funding review, Chris Cummings comments,
“We have raised concerns on numerous occasions about the impact of case fees on firms, especially where the complaints are repeatedly rejected by FOS. The distribution of cost between general levies and case fees needs to be reconsidered. A small business can incur costs running to thousands of pounds, proving its innocence.”
AIFA has been consulting members on alternative models for funding FOS and is keen to take a full and active part in the review.
