Financial Ombudsman: 1,000 New Staff Planned

The financial dispute adjudicator has announced plans to employ 1,000 more staff to tackle an "unprecedented" level of complaints by consumers.

The Financial Ombudsman Service (FOS) has made the decision after making plans to handle a 45% increase in new cases it deals with.

The FOS said in the 2013-14 financial year it expected to deal with 385,000 disputes.

It also expects to handle 2.2 million consumer enquiries in the same period, up from 1.3 million in the current financial year.

British banks and other financial organisations have come under increasing scrutiny and complaint over dubious products and services, and selling techniques.

Banks have had to set aside more than £10bn over mis-selling of payment protection insurance (PPI) products.

Deputy chief ombudsman Tony Boorman said: "While we see some businesses using complaints positively to improve customer service, many continue to frustrate their customers with delays and inconvenience.

"This has a marked impact on our workload."

The FOS was set up by Parliament as an independent body to resolve disputes of consumers and financial businesses.

It does not fine firms – that is done by the City watchdog, the Financial Services Authority.

The FOS expects to handle 245,000 PPI cases in the next financial year, nearly two-thirds of its workload.

Mr Boorman added: "Two years after the court ruling confirmed the approach that financial businesses should take when handling PPI complaints, it's disappointing that we’re still seeing significant numbers of unresolved disputes about mis-sold policies being referred to the ombudsman.

"Our proposals ensure we have the resource to tackle these record case volumes and the businesses responsible for generating the biggest workload contribute the most to sorting it out."

The FOS intends to help fund the boosted system by changing the way largest businesses pay their case fees by introducing a new quarterly account system.

The levy for the industry - calculated in line with the estimated proportion of complaints across the different financial sectors - will also rise from £17.7m to £23m because of higher PPI volumes.

It also intends to keep the supplementary case fee of £350 for each PPI mis-selling case referred to the ombudsman service, but only impose it once 25 cases are reached.