The Financial Ombudsman is gearing up to cope with a predicted 44 per cent rise in the number of disputes in the 2009-10 financial year.
An increase of that scale would see the adjudication service settle a record 165,000 complaints from consumers unhappy with treatment at the hands of financial services companies.
That compares with the 115,000 cases that the ombudsman expects to settle in the current financial year.
The anticipated increase takes account of initial forecasts from the financial services industry and reflects the anticipated impact of the recent turmoil in the financial markets and the worsening economic climate.
It is expected that the number of consumer complaints will rise in most areas covered by the ombudsman – including disputes relating to mortgages (forecast to increase by 78 per cent to 16,000 cases), current accounts (forecast to increase by 38 per cent to 18,000 cases), pensions and investments (forecast to increase by 41 per cent to 24,000 cases) and motor insurance (forecast to increase by 57 per cent to 11,000 cases).
The growth in workload is expected to result in the ombudsman’s operating costs rising from £62.7 million this year to £92.5 million (in 2009-10).
This includes the cost of 300 additional adjudicators needed to help resolve the expected 165,000 complaints.
The ombudsman service’s unit cost – its average cost of handling a case, taking all overheads into account – is forecast at £544 for the current year (2008-09) and is expected to rise by 2.8 per cent to £559 in 2009-10.
Operating costs are to be met mainly by an increased case fee – from £450 to £500 – paid by those financial firms that have four or more disputes referred to the ombudsman service during the year.