The FOS is consulting on changing the way it charges its case fees, so that firms pay less for complaints that are resolved at an early stage of the investigation process.
Currently firms pay £650 for each case the FOS investigates, regardless of the stage at which it is resolved (since 1 April £475 if it is a case submitted by a professional representative and not upheld), with most firms getting 3 free cases each year.
It is now seeking views both on whether fees should depend on the stage at which they are resolved and also, whether fees should be differentiated based on outcome.
On stages, it thinks fees could depend on whether the case is resolved using (i) proactive settlement, (ii) before a caseworker issues a provisional assessment and (iii) once the caseworker has completed their review and issued a provisional assessment. On the outcome, any changes would set fees at a level that would be revenue-neutral to the FOS so as not to risk incentivising case workers to take particular actions. In principle, upheld complaints could attract a higher fee. Or the FOS could implement changes based on both differentials.
Additionally, the FOS is consulting on moving from numbers of free cases to a monetary allowance, which it would plan initially to set at £2,000 per year, which would represent at current costs around 3 free cases for firms that are not represented or which are represented but cases have been found in favour of the complainant, and 4 free cases for respondent businesses that are represented and the case is found in their favour.
It also plans to move to quarterly billing in advance for all firms with a forecast of 25 cases or more in the following year.
Consultation closes on 8 October, alongside the ongoing consultations modernising the redress system.