#AceDebtNews says according to the latest Financial Ombudsman Service (FOS) newsletter they have forecast volumes of payment protection insurance (PPI) complaints will decline in 2014-15 as it indicated banking and credit complaints are becoming increasingly complex.
In its proposed plan and budget for the next financial year, FOS revealed it expects to resolve a record 320,000 PPI cases, reducing its stock of PPI grievances from 400,000 to 270,000 but warned numbers are likely to remain “substantial”.
The ombudsman announced it intends to tackle 64,000 new banking complaints in 2014-15, as well as another 150,000 new PPI cases at the same time as reducing its budget by 20%.
Tony Boorman, interim chief executive and chief ombudsman, said: “For the last few years our focus has been on building up our capacity to meet the unprecedented challenges of PPI.
“The investment we have made in scaling-up and developing our service is now paying off as we plan for another year of record activity, resolving twice as many PPI cases as we receive. But we’re not out of the PPI woods yet.”
FOS admitted there had been times in the past two years when the organisation received more than 12,000 PPI disputes a week, although numbers have now fallen to around 6,000 cases a week.
The organisation confirmed banking and credit complaints continue to make up the largest area of its work, although the number it has received so far this year is around a quarter lower than it had assumed in its budget for 2013-14.
FOS has also seen an increase in the number of cases related to various types of short-term credit, including payday loans.
Boorman added: “Across all of our work we continue to hear that people’s dealings with financial businesses remain strained, suggesting a lot more work is required to restore consumer trust in financial services.”
The ombudsman also set out how it will fund its workload, with the announcement it will freeze the case fee paid by businesses at £550, payable only after the 25th case, and will no longer charge businesses the £350 supplementary case fee for PPI complaints.
But FOS warned of a potential shortfall in income for its consumer credit work during 2014-15 and 2015-16, as businesses transfer to the Financial Conduct Authority, which has said it may not recover a levy from companies until 2016-17.
FOS intends to use its consumer credit jurisdiction surplus of £1.7m to offset this and suggested that should a shortage remain it may need to see this recovered through future levies paid by consumer credit firms in 2016-17.
- Are we having fun yet – getting deeper in debt?(adamchristiancontractservices.blogspot.com)
- PPI backlog lengthens delays in resolving financial complaints(telegraph.co.uk)
- Union anger as Barclays shuts PPI claims office(theguardian.com)
- What happens when PPI cash runs out?(bbc.co.uk)