Last week, the Financial Ombudsman Service (FOS) published its final Plans and Budget for the forthcoming financial year, following a consultation that closed in January.

This process takes place annually and allows for firms to feedback on plans the Ombudsman around the complaints process, and how the FOS intends to improve it. This year the FOS consulted on plans to lower fees and operational improvements. It also asked about plans to move forward with charging professional representatives, including claims management companies (CMCs), to access the Ombudsman service.

Firstly, there was good news in that the FOS has decided to move forward with lowering the case fee to £650, a drop of £100 per case. They have also confirmed reductions in the compulsory and voluntary jurisdiction levy costs.

This is something the CCTA has campaigned on in recent years, so it is good to see a step in the right direction around reducing the regulatory burden placed on firms. We have long argued that that is has been particularly intense for small and medium sized firms, and those that have been affected by the activities of claims management companies.

It is disappointing then that the Plan doesn’t cover feedback about plans to charge professional representatives including CMCs, to access the Ombudsman service. The CCTA and several members responded to the original consultation outlining their support to move forward with charging.

The FOS will now be publishing a further consultation on charging professional representatives which will outline the feedback they received and discuss next steps during the first quarter of the 2024/25 financial year.

It is troubling that these plans have not moved further forward. The status quo means that there are incentives to submit complaints, regardless of the quality. We have all seen that upload rates for complaints brought by CMCs are much lower than when raised directly by the customer. So, consumers are affected by this delay also.

We have written to the FOS CEO to outline our concerns around the progress of charging professional representatives. There is a danger that CMCs continue to exploit the system while the process rolls on. Especially when the expected consultation might propose a deadline for charging, or a new system which sees CMCs barrage lenders ahead of implementation.

For too long these firms have been able to submit claims of poor quality, because win or lose the lender will have to pay the case fee. The reduction is in the case fee is welcome but still represents a fee of £650. This remains a huge burden on lenders. Consumers also continue to suffer as claims brought on their behalf by these firms are often not substantiated. It is time to take action to improve a system that is meant to assist those that have been treated unfairly.