Ombudsman gears up for record complaints

Nia Williams

January 13, 2010

The budget sets out how the ombudsman service plans to gear up to resolve a forecast 27% increase in the number of disputes in the 2010/11 financial year.

This will involve the ombudsman settling a record 210,000 complaints from consumers unhappy with their treatment by financial firms. This compares with the 165,000 consumer complaints that the ombudsman expects to resolve in the current financial year – itself a 44% increase on the previous year.

The further substantial increase in the volume of new cases expected to be referred to the ombudsman in 2010/11 – rising to 190,000 – takes account of initial forecasts from the financial services industry and largely reflects the continued impact of the recession.

The ombudsman service’s unit cost – its average cost of handling a case, taking all overheads into account – is forecast at £587 for the current year (2009/10) and is expected to fall by 8% to £540 in 2010/11.

This means that the total levy to be paid by the financial services industry in 2010/11 – raising 20% of the ombudsman service’s funding – can be frozen at the amount levied in 2009/10. And the case fee – paid by those financial firms that have four or more disputes referred to the ombudsman service during the year, and meeting the other 80% of the ombudsman service’s funding requirement – will also be held down at the previous year’s rate of £500.

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