The Financial Ombudsman Service has set out proposed changes to its fee structure to make it a fairer model.
It proposes to charge claims management companies and other professional representatives up to £250 to lodge a case, reduced to £75 if the case outcome is in favour of the consumer.
These new fees are part of a consultation launched by the Fos as it seeks to make its fee model fairer by recovering some of its costs from CMC’s and representatives as well as financial services firms.
The ombudsman said the service will remain free to those who bring their case directly to the service, as well as families, friends, charities and voluntary organisations who may be helping them.
It also confirmed that, as is the case with financial services firms, all professional representatives will be allowed three free cases a year, beyond that they will be charged the new £250 fee.
If the Fos does not uphold the complaint it has said the higher fee collected will be used to reduce the fee for the financial business against whom the complaint was initially raised.
James Dipple-Johnstone, deputy chief ombudsman at the Fos, said: “We are committed to improving our service so it is as easy to use and accessible as possible, while ensuring it remains free for all consumers and that those with upheld complaints can keep all of any award we make.
“Professional representatives can play an important role in resolving financial disputes. However, they gain financially from our service without contributing to the running costs, and with little incentive to ensure that claims they advance have merit.
“The new proposed charges are important to ensure we cover the costs associated with helping resolve disputes and we feel it reflects a fairer allocation of those costs.”
This announcement follows on from earlier consultations, with these proposals receiving broad support, according to the Fos.
It said that in the past two years, 20 per cent of cases referred to the service have been brought by professional representatives.
Of these cases, fewer than 25 per cent result in a different outcome for the complainant than they have already been offered by the responding firm.
The ombudsman said that consumers bringing their case without representation achieve greater success with around 32 per cent achieving a better outcome.
It also said that consumers would keep the full value of any redress awarded if they brought the case to the ombudsman as well as an annual levy.
alina.khan@ft.com
