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Our future funding model – Discussion Paper

Link(s):https://www.financial-ombudsman.org.uk/files/323975/Financial-Ombudsman-Service-Future-Funding-Discussion-Paper.pdf

Context

The FOS has published a Discussion Paper which seeks feedback on it’s proposals to change the funding model for 2023/24.

Key points to note

The FOS has put forward various options for making changes to the funding structure in the future. These include:

  • Changing the Compulsory Jurisdiction (CJ) levy to recover fixed overheads
  • Simplifying the Voluntary Jurisdiction (VJ) levy
  • Updating the case fee structure, introducing a differentiated case fee model
  • Charging different case fees according to the stage the case has reached before it is resolved
  • Varying case fees according to the type of product the complaint relates to
  • Updating the group account fee arrangement, reducing the margin of 15% to 5% and removing the free case allowance in group fee account arrangements
  • Charging fees as soon as a case is received
  • Setting a time limit for claiming for refunds on overpaid case fees
  • Publishing more detailed data on complaints

The FOS has also included ideas for future funding beyond 2023/24 such as:

  • Charging professional representatives a fee to bring complaints
  • Varied case fee according to case complexity
  • Discounts for cases resolved in batches
  • Introducing supplementary fees for uncooperative firms

Next actions

The Discussion Paper is open for responses until 5th August 2022.