The Financial Ombudsman Service (FOS) expects to have resolved the majority of its planned cases and intends on doing more collaborations and reducing its fees, despite criticism it is unfit for purpose.
The FOS’ plans and budgets for 2021/2022, which follow feedback from stakeholders, showed that in the year to the end of March 2021 the service expects to have resolved in excess of 95 per cent of the volume of cases it had originally planned to in its general casework.
However, the pandemic has also contributed to the substantial increase in the number of new complaints it received in 2020/21, forecast to be at least 45 per cent higher than expected at the beginning of the financial year.
In the 2021/22 tax year, the FOS expects to receive 170,000 complaints and resolve 220,000 complaints, ensure its equipped to respond to more complexity and vulnerability in complaints and resolve more complaints than it receives and invest in capacity to resolve complaints at scale.
The service’s budget includes a cost base of £260m, an individual case fee of £750, a compulsory jurisdiction levy of £96m and a voluntary jurisdiction levy expected to raise £1m.
The FOS said it will collaborate with businesses, the regulator and other stakeholders, sharing insight to help prevent complaints and unfairness arising and work to better understand and improve people’s experience of using the service.
It will also develop its technology and maintain a focus on reducing costs and improving efficiency.
“In the two decades it’s been operating, the FOS has needed to respond to many changes in its landscape – but Covid‑19 has impacted everyday life like no other,” said Caroline Wayman, chief ombudsman and chief executive of the FOS.
“At such a challenging time, the service’s ability to deliver fair answers, as quickly as possible, is as vital as it’s ever been for lives and livelihoods.”
This follows the Institute of Economic Affairs (IEA) calling the FOS unfit for purpose and in need of reform.
A report from the think tank, written by IEA head of regulatory affairs Victoria Hewson, said the service fails to deliver its primary objectives of providing “fair and reasonable resolution of disputes at speed” and “value for money and supporting competition and consumer welfare”.
The report said the FOS lacks transparency and accountability and requires major reform.
The report author Hewson said that as the FOS must consider what is ‘fair and reasonable’ in terms of law and regulations when deciding a case, but is not bound to do so, many consumers believe they have been treated unfairly.
It said the time is right for the FOS to address concerns with its decision-making process and establish a formal route of appeals for parties to “ensure that the process and decisions are consistent with the rule of law,” the report added.