The Financial Ombudsman Service (FOS) has revised its expectations for the 2024/2025 financial year (FY), predicting an increase in complaints to 210,000, up from the 181,300 cases initially estimated. 

This surge is attributed to various financial grievances, including unaffordable lending, credit card issues, and fraud and scams.  

Additionally, certain motor finance commission cases, not covered by the Financial Conduct Authority’s (FCA) review, are also expected to contribute to the FOS’ increased caseload. 

The FCA’s ongoing investigation into the motor finance sector, particularly historical discretionary commission arrangements, could lead to compensation for consumers overcharged for car loans.  

The FOS is preparing for 149,200 banking and credit complaints, with 13,900 related to motor finance commission outside the FCA’s scope.  

In insurance, 47,400 complaints are projected, including 18,700 concerning motor insurance. 

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The FOS noted that it has improved its complaint resolution efficiency, reducing the average case handling time from nearly five months in 2022/2023 to just under three months by the end of 2023/2024.  

It aims to resolve 90% of cases within six months and plans to address 17% more cases in the upcoming year, increasing from 192,500 to 225,000 resolutions. 

To manage the anticipated workload, the FOS will be recruiting additional case handlers.  

To reduce operational costs, the ombudsman has also announced a reduction in its case fee from £750 to £650. 

FOS chief executive and chief ombudsman Abby Thomas said: “The Financial Ombudsman Service continues to make significant improvements in the service we offer, getting customers decisions more quickly while maintaining the high quality of our work. We will be even more ambitious next year, with plans to resolve complaints faster, while also reducing the cost of our service to businesses. 

“In the year ahead, it is likely that our service will see increasing levels of complaints, with many of those disputes expected to focus on the critical issues that impact people’s everyday lives. This includes perceived unaffordable lending, concerns about car loan agreements, and disputes around fraud and scams.  

“With uncertainty around casework levels in the year ahead, we are building a service which is flexible and agile, allowing us to respond to increased demand across any area of our business.”