United Kingdom (and EU regulation)

FOS publish 2022/23 plans and budget Consultation

By Simon Lovegrove (UK) on December 16, 2021 Posted in Retail, United Kingdom

On 15 December 2021, the Financial Ombudsman Service (FOS) opened a consultation for their strategic plans and budget for 2022/23.

Every year, the FOS consults stakeholders on what they think may contribute to complaints trends and volumes it may see in the upcoming financial year. The FOS sets these out in the context of its own plans for developing and investing in its service.

Key points in the strategic plan includes:

Payment protection insurance (PPI) is finally coming to a close. Having resolved over two million cases, the FOS is now transitioning towards a world beyond it.
The FOS has seen significant increases in non‑PPI cases since the start of the pandemic. Incoming volumes of around 90,000 more than it expected over that period have resulted in a backlog and waiting times for customers being too long. The FOS has been making a concerted effort to reduce the backlog as part of its plans for this year (2021/22), but are not expecting a decline in cases, which will continue to challenge that effort.
The FOS has felt the impact of Covid-19 on both the volume and nature of complaints it received in 2020/21 and 2021/22. It has led not only to a significant and unexpected increase in the number of people seeking assistance from the FOS, but also impacted plans to reduce the queue of around 28,000 that existed at the start of 2020/21. The FOS had almost 90,000 complaints waiting to be allocated to an investigator at the start of this financial year, mainly driven by the additional volumes it had received in the previous year.
In order to deliver on its queue reduction targets and invest in the changes required without allowing queues to grow, the FOS will need to raise additional income. The FOS is therefore consulting on a budget that generates £244m of income that includes: increasing the compulsory jurisdiction levy by £10m to £106m, raising an estimated £11m by reducing free cases to pre‑PPI levels from 25 to 3 and reducing free cases for group firms from 50 to 15.

The consultation closes on 31 January 2022.