FOS feeds back on future funding

FOS has published feedback following its discussion paper on its future funding.

Following comments, it will not take forward some of the options on which it sought views, such as charging professional representatives, charging businesses for delays due to non-compliance and giving discounts for bulk closures. Neither will it consult on case fees based on case complexity. There was strong support for charging CMCs who flood FOS with templated complaints that are often without merit, but ultimately FOS has decided that controlling the conduct of professional representatives is the job of the FCA or SRA, and that it will not now take the time- and resource-intensive route of asking for the change to legislation that would be necessary to enable it to impose a charge.

FOS will now:

  • consult on changing its CJ and VJ levies so as to recover fixed costs (those which do not materially change with volume);
  • propose a 12 month time limit for disputing case fees; and
  • consult on trialling group fee account arrangements.

It is still considering what to do about differential case fees depending on case stage or product type, and on charging an initial case fee at conversion.  Most respondents felt that although the current flat fee model is easy to understand, it would be fairer to have a differentiated model, but FOS needs to undertake modelling before proposing how this might work. On the case fee at conversion, respondents were generally supportive, but again FOS needs to consider how the benefits of implementing some initial fee can be weighed against the administrative burden and risk of errors of a second or even multiple fees.

Emma Radmore