Service ready for record number of complaints

The figure is 27 per cent higher than the number of cases being looked at in the current financial year, which has itself seen a 44 per cent jump compared with the previous 12 months.

The group expects to receive 190,000 new complaints from people who are unhappy with treatment they have received from financial services firms during the 12 months to March 2011.

It blamed the projected increase, which would be up from the expected 167,000 complaints it will receive during 2009-10, on the impact of the recession, as well as the ongoing high volume of complaints it is receiving about controversial payment protection insurance (PPI).

The ombudsman expects to receive a further 46,000 complaints about PPI, which covers debt repayments if the holder is unable to work or loses their job, during 2010-11, up from 42,700 this year.

It also predicts a 55 per cent jump in complaints relating to consumer credit to 10,200, as well as a 16 per cent rise in disputes relating to banking to 85,000.

The group warned that the continued growth in its workload would lead to its operating costs rising from 96.6m this year to 113.5m in 2010-11, partly due to the need to recruit 300 additional staff to help resolve the record number of complaints it expects to receive.

Despite the overall rise in costs, it expects the average cost of handling each case to drop from 587 during the current year to 540.

It added that the total levy paid by the financial services industry, which accounts for 20 per cent of its funding, would remain frozen at 19.5m.

The fee paid by firms that have four or more disputes referred to the ombudsman during a year, which makes up the rest of its funding, will also be held at the current rate of 500.