The Monetary Ombudsman Service (FOS) is charging claims administration corporations and no-win, no-fee legislation companies to make complaints in a U-turn only a 12 months after ruling out the transfer.
The FOS vowed to maintain complaints free for customers however is launching a session on charging for complaints from claims administration corporations (CMCs) and different skilled representatives after seeing a surge in circumstances.
A fifth of its casework is now via these companies, it mentioned.
The FOS mentioned it had now been handed new powers within the Monetary Companies and Markets Act, permitting it to cost for some of these claims ought to it determine to go forward.
It comes only a 12 months after it dominated out charging CMCs for complaints following suggestions on the matter as a part of its wider 2022-23 plans and funds session.
The FOS additionally mentioned on the time that it will not proceed with legislative modifications to allow it to cost skilled representatives.
However the change of stance comes after a soar in circumstances from these companies, in addition to “good and unhealthy behaviour” being seen within the sector, which impacts its potential to assist different clients and will increase case occasions, based on the FOS.
James Dipple-Johnstone, deputy chief ombudsman on the FOS, mentioned: “We’re dedicated to bettering our service so it’s as simple to make use of and accessible as doable, whereas guaranteeing it stays free for all customers and that these with upheld complaints can preserve all of any award we make.
“Skilled representatives play an vital position in resolving monetary disputes.
“Nevertheless, 20% of circumstances are introduced by representatives, a few of whom profit commercially at scale, but greater than half of such circumstances aren’t upheld.
“It’s, due to this fact, well timed that we discover whether or not our price construction is true for the present local weather and finest displays the prices we incur in serving to resolve disputes for purchasers.
“We welcome all views from trade and shopper teams on our proposals on whether or not and the way a charging regime would possibly work in observe.”
The FOS revealed it’s contemplating charging CMCs {and professional} representatives between £50 and £200 upfront for preliminary work on the case, relying on complexity, or a possible £650 on closure of the case to cowl the price of case conversion, casework time and different prices concerned in resolving the grievance.
However it’s also proposing that the primary three complaints circumstances can be freed from cost.
It’s in search of views on how a charging regime could be launched, together with on the price ranges, in addition to the affect on grievance volumes, the potential affect on totally different teams of complainants and the lead time required for companies {and professional} representatives to be prepared for modifications.
The session is open till January 30.
Particulars of the proposals have been revealed alongside particulars of its plans and funds for 2024-25, which reveal it’s anticipating to obtain 181,300 new complaints about monetary suppliers within the subsequent monetary 12 months.
It’s set to chop the price of its service to trade, with proposals to scale back the case price by £100 per case to £650.
General, it mentioned modifications would result in a £60 million lower in case price and levy prices to companies.
It has additionally set itself a brand new goal of resolving 90% of circumstances inside 5 months.