Fos recruits staff to deal with PPI
The Financial Ombudsman Service is estimated to spend up to £12m on new recruits to cope with soaring case loads, driven mainly by mis-sold payment protection insurance, it has been revealed.
The ombudsman is looking to hire 500 new case assessors to cope with the influx of PPI-related complaints, as well as bringing more project managers and team managers on board.
A spokesman said Fos was looking to increase its staff to 2500 from the current 2000 by the end of the financial year.
However, she added: “This is only an estimate and depends on the level of complaints we receive. In the current complaints climate, this remains volatile.”
The extra staff will be funded by a new supplementary case fee that businesses responsible for the bulk of PPI complaints – the banks – will have to pay. This means smaller businesses or those who did not sell PPI will not be penalised.
The supplementary case fee of £350 will be payable when Fos formally takes on a complaint involving PPI, but will be charged only when businesses have more than 25 of these cases a year.
The fees are estimated to bring in £52.4m a year to the ombudsman’s £191.1m operational budget for 2012/2013.
Natalie Ceeney, chief ombudsman, said: “Our plan is to double the number of our case-handling staff by the autumn of 2012. This expanded resource will help us manage the volatilities in our workload more effectively and help us deal with the rising volumes of PPI complaints heading our way.”
The news came as the ombudsman announced that the number of complaints brought against IFAs has nearly halved to 2644 in the past five years, representing 1 per cent of all cases in 2011/2012.
Although the overall number of complaints about IFAs had fallen, the proportion of upheld complaints remained the same.
A spokesman for the ombudsman said the figures reflected better than expected market performance that meant investments performed more in line with expectations, as well as “continued pockets of fearlessly fought, entrenched disputes”.
The overall proportion of disputes relating to banks remained the same as the previous year, at 65.5 per cent.
Fos received 264,375 new cases in the year, of which 60 per cent were related to PPI – the highest number ever received in a year about a single financial product. It was still receiving PPI complaints at a rate of more than 1000 new cases every day.
Jaskarn Pawar, director of Northamptonshire-based Investor Profile, said: “It’s good news that IFA complaint rates are falling. This probably has a lot to do with the treating customers fairly initiative that has had a fantastic effect on the industry and helped many companies focus on looking at every client individually and delivering fair outcomes.”
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