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FOS funding crisis - emergency levy may be required.
Posted by Admin on 2011-03-28 15:59:17 BSTThe Financial Ombudsman Service may have to impose an emergency levy on all firms following the refusal of many firms to pay case fees for PPI complaints whilst the results of the British Bankers Association Judicial Review are awaited.
The FOS warned in January that it could exhaust its reserves within six weeks if the impass continued. Normally income from case fees would satisfy its ongoing funding needs, but it may now be forced to impose an additional interim levy which could affect ALL firms, not just those selling PPI. It is also likely that the levy for the coming year will have to increase by 25% due largely to the increased number of PPI complaints being received. This will be a bitter pill for the many (small) firms who have had no or very few complaints and they may well question whether the FOS plans to freeze for a second year at £500 for the fourth or subsequent complaint is fair.
A decision is expected by the FOS in the coming week.
