Mis-sold Mortgage Claims > Mortgage News
Mis-sold claims may suffer as Financial Ombudsman Service has funding shortfall
Tue, 11 Jan 2011
The Financial Ombudsman Service (FOS) has sent a clear warning to the claims sector that it will not be able to finance the forecasted substantial increase in complaints. These will include mis-sold mortgages as well as the thousands of payment protection insurance (PPI) claims.

This news follows the British Bankers Association (BBA) application for a judicial review of the Financial Services Authority’s (FSA) new complaints handling measures policy for PPI . Should this review be delayed it will reduce the income derived from fees received by FOS from the financial sector. Cases that are referred to FOS are often subject to a fee and a levy, this fee has recently been frozen at £500.00, further restricting the available funds for the service.

FOS has published its proposed budget for the next financial year, with an update of the current claims workload for 2010-2011. This shows how it plans to manage an increased caseload of up to 208,000 complaints compared with 180,000 in the current year. FOS points out that this "volatility" is driven by PPI cases which are higher than the 46,000 it has budgeted for. In order to manage these levels it says a budget will need to be between £90million and £116million.
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