Trends

We believe that, with the PPI complaints deadline approaching, the Financial Ombudsman Service should be ready for the possibility of blanket (bogus, incomplete, or poorly substantiated) claims from claims firms in non-PPI areas. The Service deals with complaints based on their individual circumstances, and therefore needs to continue to be prepared for blanket assertions from claims firms across a range of cases where the individual facts are at variance from the broad assertion.

It might also be necessary, depending on developments through horizon three to revisit previous suggestions

• there should be a separate and formal ‘mass complaints’ procedure, and
• (while, in the BSA’s view, the Service must always remain free of charge to individual consumers) that claims firms acting on behalf of complainants should have to pay, without recourse to their client, an additional case fee in respect of complaints that the Service rejected.

Funding model

The BSA strongly welcomes the proposal to keep the 25 “free” case fee model. While all firms contribute towards the general levy, “free” case fees continue to be consistent with the ‘polluter pays’ principle, which we support. We also support the plan to continue to keep the case fee frozen at £550.

The Financial Ombudsman Service is at a particularly uncertain time because PPI will tail off and we do not yet know how claims firms will react, and because the Service will soon take on two significant new areas of complaints; ie SMEs and CMCs. Therefore, it would make sense to retain the status quo (ie the Control option – a case fee 85% and a levy 15%) for at least another year.

Service focus

The Financial Ombudsman Service exists primarily to resolve complaints quickly and with a minimum of formality, based on what is fair and reasonable in the individual circumstances of the case. Therefore, while non-core activities (such as technical advice, engagement and insight sharing etc) are important and useful, we believe that the Service should never lose sight of its key role.

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