Regulation  

Ombudsman seeks more staff as caseload rises

A 51-page Fos consultation, including its plans and budget for 2013/2014, revealed that the service was receiving more cases concerning disputes with mortgage lenders.

It said: “Apart from payment protection insurance, complaints involving banking and credit (including mortgages) continue to make up our largest area of work.”

According to the data, Fos has seen a 15 per cent increase in the number of these cases compared with 2011/2012. Based on these trends, the data suggests Fos can expect to receive 77,100 new cases relating to banking and credit by the end of 2012/2013.

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The document said: “We have seen a significant increase in the number of cases where consumers have been experiencing financial pressure – and have sought additional help and flexibility from their lender, particularly in relation to mortgages.

“But with lenders focused on reducing their overall costs, we have found it increasingly difficult to find common ground to settle these cases informally. If this situation continues, we are likely to find these types of cases increasingly complex and time consuming to resolve.”

This includes interest-only mortgages. The number of cases relating to investments – including pensions and mortgage endowments, increased by 31 per cent during 2012, with 18,400 more expected up to the end of its financial year in March.

The Fos caseload is expected to increase by 45 per cent in 2013/2014, with 385,000 new cases; to this end, the ombudsman is set to recruit 1000 more case workers this year.

To fund this, the document proposed a levy of £23m, up from £17.7m in 2012, largely reflecting PPI volumes.

It also proposed increasing the number of free cases from three to 25, raising the individual case fee from £500 to £550.

Tony Boorman, deputy chief ombudsman, said: “While we see some businesses using complaints positively to improve customer service, many continue to frustrate their customers with delays and inconvenience. This has a marked impact on our workload.”

Richard Kafton, managing director of London-based Cedar House Financial Services, said: “Not for the first time, the majority of practitioners who never dealt with PPI, are being asked to cough up for the misdeeds of those practitioners who did get involved.”

Source: Fos

New cases

2011/12
Actual

2012/13
Forecast

2013/14
Budget

Banking56,80368,40076,000

Consumer credit

7,416 8,7009,500

Insurance (not including PPI)

27,554 29,50031,000
Investments and pensions14,886 18,40018,500
PPI (payment protection insurance)157,716 250,000 250,000