PEER-TO-PEER lenders could face increased fees for regulators to handle customer complaints as part of new budget proposals from the Financial Ombudsman Service (FOS) for all regulated firms.
FOS is funded via a levy – which it has proposed at £106m for 2020/2021 – and case fees.
For 2020/2021, the FOS is proposing increasing its individual case fee from £550 to £650.
Most firms, including P2P lenders, currently only have to pay case fees after their first 25 cases each year but FOS is proposing reducing this to 10.
Larger firms with subsidiary brands will have the number of free cases reduced from 125 to 50.
Read more: P2P lenders braced for fee hikes
“For the past seven years, despite inflationary pressures, we’ve frozen the individual case fee at £550,” the FOS said.
“Given the income we expect to need in 2020/2021, we plan to set the case fee at £650.
“This will apply to all cases closed after 1 April 2020, regardless of when the case was referred to us.”
The FOS said it expects to deal with fewer complaints but warns they are more complex.
“We’ve continued to see a trend towards complexity, with many complaints about issues that require significant time and resources to resolve – including disputes centred on fraud and scams, insurance pricing and self-invested personal pensions, and those about the affordability of lending and involving people in vulnerable circumstances more generally,” the FOS said.
The proposals form part of a consultation on the FOS budget that closes at the end of January 2020.
FOS said it dealt with 388,392 complaints in 2018/2019 and expects to deal with 315,000 in 2019/2020 before it reduces to 245,000.
Most complaints in recent years have been about payment protection insurance and banking and credit.
P2P lending made up just 107 complaints in 2018/2019, with 19 per cent upheld.