The new budget is supposedly a reflection that the unit cost for handling complaints has fallen from £730 to £688 under the new single Financial Ombudsman Service. Under the budget plans, the aim is to cap the unit cost at £688 next year aswell.
Although the proposed budget for next year is greater than this year’s budget of £27.6 million, the FOS claims that it has remained constant in real terms compared to this year.
The FOS is predicting that there will be a similar volume of work next year to this year, which means that it will handle around 250,000 enquiries and investigate 40,000 disputes.
The FOS is funded by financial firms which, under the new funding arrangements introduced this year, will mean that firms have to pay a general levy and a case fee for each complaint brought by a customer and subsequently investigated.
Iris Baker, spokesperson for the FOS, said that brokers will have to pay a fee for each case examined by the Ombudsman, whether or not they win, and if they lose they may have to pay compensation as well.
"From the start of the financial year on 1 April this is likely to be around £350-400 per case, although not every case is investigated and if it is turned away then there is no fee to pay. Last year there were almost 415,000 queries that resulted in 31,347 cases. However, we are looking at introducing scaled fees in the future and the cost would be lower the earlier the case is settled."
