Credit, collections & insolvency news
The Financial Ombudsman (FOS) has predicted that cost of living pressures drive will create a surge in consumer complaints over the next year.
In December 2023 FOS estimated that it we would receive around 181,300 new cases in 2024/25. Following discussions with businesses and consumer groups that figure has since been elevated to 210,000.
The predicted rise is a result of several factors including everyday financial concerns such as unaffordable lending, credit card complaints and fraud and scams. It’s also a result of those motor finance commission cases.
FOS says it has reduced the time it takes to resolve a case from 4.8 months in 2022/23 to 2.96 months by the last three months of 2023/24. It has also set itself a new target of resolving 90% of cases within six months.
Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said “The Financial Ombudsman Service continues to make significant improvements in the service we offer, getting customers decisions more quickly while maintaining the high quality of our work. We will be even more ambitious next year, with plans to resolve complaints faster, while also reducing the cost of our service to businesses.
“In the year ahead it’s likely that our service will see increasing levels of complaints, with many of those disputes expected to focus on the critical issues that impact people’s everyday lives. This includes perceived unaffordable lending, concerns about car loan agreements, and disputes around fraud and scams.
“We have committed to resolve 17% more cases in the year ahead than in 2023/24, up from 192,500 to 225,000. This increased workload will be tackled partly by recruiting more case handlers. There is also a commitment to continue investing in the customer and business digital journey, as well as expanding our regional presence in the UK to ensure we are accessible to different communities.
“With uncertainty around casework levels in the year ahead, we’re building a service which is flexible and agile, allowing us to respond to increased demand across any area of our business.
“Our plans will help ensure that the customer is at the heart of everything we do. We want every person who engages with our service to clearly understand the outcome of their case. Now more than ever it’s crucial that businesses work with us to improve all customers’ experiences of financial services.”
Within the new plans, FOS says it will confirm its intention to reduce the cost of our services to the industry in 2024/25. The case fee will drop by £100 per case to £650, while the compulsory and voluntary jurisdiction levy costs to businesses will also be reduced. This will result in over an effective £60 million reduction in case fee and levy costs to businesses, once inflation and increases in the number of cases will be taken into account.
