City companies that file customer complaints with them will receive more than 25% rebates, while claims management companies will collect the case for the first time, bringing the case to the financial inspector service.
The dispute agency said that under the new rules, if a complaint filed by a claim management company or a complaint filed by a professional representative “is not maintained or withdrawn, the financial business complained to it will pay a case fee of £475, not £650.”
The Ombudsman added that it will begin charging the claims management company for the first time complaints on behalf of its clients.
It said the companies stood out in the payment protection insurance scandal and they will be able to bring the service for a year for free.
But thereafter, they will be £250 per case from April. They will receive a £175 rebate, “if the result is good for consumers”.
“This move is intended to make us more equitable in funding arrangements and encourage professional representatives to file better complaints, given their merits, more diligent before recommending them,” the Financial Ombudsman Service said.
It added that the company lags behind about 47% of cases handled between April and December last year.
After being established by parliament in 2001, regulators resolved disputes between financial companies and their clients.
The move comes the day after the Financial Ombudsman Service unexpectedly replaced CEO Abby Thomas, Interim Ombudsman James Dipple-Johnstone.
Dipple-Johnstone said: “We saw more cases brought by professional representatives, but fewer of these cases have led to better results for clients.
“At present, there are few commercial incentives for the representatives to ensure that the complaints they file have sufficient basis or value.
“As a nonprofit service, we spend limited resources on thousands of withdrawn or abandoned cases, which may result in longer wait times for other clients.”
Stephen Haddrill, director-general of the Finance and Leasing Association, welcomed the move, but added that the proposed fees charged to the management company should be higher.
“The introduction of fees is the most important step forward. Claims management companies are the major businesses that shouldn’t have free travel, especially because they drive the compensation culture, which can hurt investments,” said Haddrill. confidence in the UK and threatens growth.
“However, today’s decision on the charging level is not satisfactory and we will continue to call for an increase.
He added: “Professional representatives should charge the same basic fee as lenders to provide a fair, equitable approach. It is also recommended that lenders must pay a share of case fees, even if they are not at fault, and must serve the financial ombudsman. The purpose goes against the way.
“We have no other examples of fewer losers than winners in cases involving both businesses.”
The disputed agency added that cases brought by individuals, charities and voluntary organizations will remain free.
Thomas became the fourth person in charge of the regulator’s sudden departure from his post in November during a speech at the keynote building in November.
Rachel Reeves added that regulations were enacted to protect the economy after the 2008 global financial crisis “goes too far.”
Last month, Doug Gurr, former head of Amazon UK, was appointed interim chair of the Bureau of Competition and Markets, after Marcus Bokkerink suddenly left more than two years ago.
