Summary
This policy statement from the Financial Ombudsman Service outlines new rules for charging case fees to claims management companies (CMCs) and other professional representatives referring complaints. The initiative, under regulations from HM Treasury, seeks to create a fairer funding model by distributing costs more equitably between service users and financial firms while encouraging better-prepared complaint submissions.
Key Take Aways
- New Case Fee: A maximum fee of £250 applies to cases referred by CMCs, with a £75 minimum fee for all eligible cases exceeding the free case threshold.
- Annual Free Cases: CMCs are allowed up to ten free cases per financial year.
- Outcome-based Credit: CMCs receive a £175 credit if cases are upheld or resolved favorably for the complainant.
- Market Impact: The new regime aims to improve service efficiency without significantly disrupting CMC operations or consumer access to complaint resolution.
- Stakeholder Feedback: The proposal incorporated extensive feedback from 137 stakeholders, balancing concerns of both financial firms and CMCs.
- Regulatory Alignment: The charging mechanism aligns with FCA and SRA regulations governing claims management fees.
- Operational Efficiency: New online tools and case-handling improvements will streamline processes for CMCs, financial firms, and complainants.
- Consumer Access: The service remains free for direct complainants, emphasizing clarity and accessibility for vulnerable users.
- Impact Monitoring: The Ombudsman will monitor fee impacts through annual strategic reviews and consultation processes.
Innovation
- Digital Integration: Implementation of new case management portals and structured online forms enhances efficiency for case submission and management.
- Funding Reform: This model represents a significant shift in how complaints are managed and funded, aiming to balance fairness and operational cost control.
Key Statistics
- The case fee structure applies to 20% of cases referred by CMCs, with most referrals falling under the free case provision.
- Feedback was collected from 137 respondents during consultations in 2023 and 2024.
- Approximately 80% of complaints referred to the Ombudsman are not professionally represented.
Original: LINK
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