Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Corporate Crime & Compliance UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (December 17, 2020, 1:12 PM GMT) -- The Financial Ombudsman Service has said it received 40% more complaints than it had anticipated in the first six months of the year, largely arising from the coronavirus pandemic.
The increase was caused by a surge in claims linked to banking scams and disputes with insurers over coverage, the financial complaints watchdog said in a report on Wednesday. The agency said it handled almost 98,500 general casework complaints between April and September, 38% more than the 71,227 complaints it had expected to receive in the six months.
The Ombudsman Service said it was initially expecting to have 145,000 claims on matters other than for personal protection insurance, or PPI, for the full year. But that is now set to soar to 180,000. The FOS said there had been an increase in credit card scams during the health crisis, but added that there were many cases in which banks had "wrongly refused" refunds to customers.
The report said it had also found an increase in the number of disputes over travel insurance and insurance for event cancellation, primarily from the first national lockdown in March.
The FOS said there was "considerable uncertainty" over how the pandemic would play out. But the service said there would probably be 160,000 complaints next year, of which just 20,000 will be about wrongly sold PPI. The watchdog said it is set to field 230,000 complaints in the 2020 to 2021 financial year.
The Ombudsman Service has launched a consultation over plans to hike the levy it charges regulated companies in the financial year 2021 to 2022. It said it had originally planned to raise the levy for those 12 months in March from £84 million ($112 million) to £106 million but held off because of concerns about the impact on companies reeling from the first lockdown.
"This was the right and fair thing to do," said Caroline Wayman, chief ombudsman. "Eight months on, the picture remains extremely challenging for firms. Equally, the rationale for changing our funding arrangements still applies."
Wayman said the freeze on the levy meant FOS faced an expected budget deficit of £53.2 million by the end of the financial year of March 31, 2021, rather than the £17.8 million it would have had in its financial reserves.
But because the number of complaints it had received over payment protection insurance misselling had dropped from the 100,000 it had originally expected to receive this year, to a projected 50,000, that deficit was now expected to be £43.1 million.
--Editing by Ed Harris.
Update: This story has been updated to add statistics on complaints.
For a reprint of this article, please contact reprints@law360.com.
