Home Business News FCA asked to freeze levies in £25m Covid-19 mitigation plan

FCA asked to freeze levies in £25m Covid-19 mitigation plan

by LLB Reporter
2nd Apr 20 12:28 pm

The Financial Ombudsman Service has revised its funding arrangements for the coming year due to the “unprecedented impact on firms” during the Covid-19 pandemic.

The revisions represent a combination of targeted interventions to benefit smaller firms and broader steps to benefit other firms that contribute to its funding.

As part of the revision, FOS is asking the FCA to freeze all minimum levies at 2019/20 levels.

In 2020/21, FOS will maintain the number of ‘free’ cases at 25 for firms outside the group account fee arrangement. This means nine out of ten firms won’t pay any case fees (set at £650). In line with its consultation, the number of ‘free’ cases will be 50 for each group in the group account fee arrangement.

The overall income the service takes from its levy will also be reduced – with a case fee to levy income split of around 70:30, compared with the 60/40 split it consulted on.

FOS will absorb the cost of these changes, which amount to £25.4m in total by reducing its reserves.

Chief ombudsman and chief executive, Caroline Wayman said, “The Covid-19 crisis is unprecedented – and at the moment, it’s simply not possible to anticipate the nature and scale of its consequences for lives and livelihoods.

“But it’s already clear that the businesses we cover will have a key part to play in mitigating Covid-19’s worst effects.

“In close collaboration with the FCA, we’ve worked hard to ensure we’re playing our part minimising the pressure businesses are facing.

“And we’re committed to resolving any complaints that arise – sharing what we’ve seen to prevent the same problems happening again.

“It’s also vital that we do all we can to support our own people – including ensuring those who are personally more vulnerable, or who are caring for others, have the flexibility to do what they need to.”

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