Ombudsman’s work to soar

The Financial Ombudsman Service predicts a 44% increase in the number of disputes in the 2009/10 financial year, settling a record 165,000 complaints.

This compares with the 115,000 consumer complaints that the ombudsman expects to resolve in the current financial year.

• Motor insurance complaints are expected to rise by 57% to 11,000 cases
• Mortgage disputes forecast to increase by 78% to 16,000 cases
• Current accounts complaints forecast to increase by 38% to 18,000 cases pensions and investments expected to increase by 41% to 24,000 cases

The growth in the ombudsman's workload will involve an increase in operating costs from £62.7m (forecast for 2008/09) to £92.5m (in 2009/10). This includes the cost of 300 additional adjudicators needed to help resolve the expected 165,000 complaints.

The budget also covers increased expenditure on quality-assurance systems and on accessibility and openness initiatives (in line with Lord Hunt's recommendations published in April 2008 in his independent review of the ombudsman service).

• The ombudsman service's unit cost - its average cost of handling a case, taking all overheads into account - is forecast at £544 for the current year (2008/09) and is expected to rise by 2.8% to £559 in 2009/10.
• Operating costs are to be met mainly by an increased case fee - from £450 to £500 - paid by those financial firms that have four or more disputes referred to the ombudsman service during the year. It is proposed that the first three cases should continue to be free for each firm covered by the ombudsman.