A BBC exposé of the Financial Ombudsman Service has revealed that the complaints handler is paying its staff bonuses to close cases quickly as it struggles to deal with an influx of claims.
Radio 4's Money Box Investigates, aired last Tuesday night, revealed FOS staff are given targets and paid bonuses for closing cases.
The programme also questioned the consistency and quality of service at the Ombudsman which will be dealing with mortgage and general insurance complaints, come October 31.
On the programme, Walter Merricks, chief financial ombudsman, admitted his 600 adjudicators receive bonuses if the number of cases they close exceeds their target.
“We allow staff to build up slightly increased earnings if they deal with slightly more cases,” says Merricks.
Mick McAteer, senior policy adviser at the Consumers' Association, said he was unaware the FOS used bonus rewards and targets. “We would prefer that sort of system wasn't used. It would be better if the staff and the Ombudsman had sufficient resources. This would give them more space to assess cases better,” he says.
The programme also questioned whether staff at the FOS were experienced enough to deal with cases. The FOS recently announced it was to recruit an extra 100 complaints investigators to cope with the expected rise in cases. But the FOS admitted staff might start off as call handlers and then be expected to manage their own cases after two months.
Brian Lentz, principal of Portfolio Insurance Consultancy and Mortgage Broker, says: “The policy to close cases quickly does not allow a case the depth a court would and is designed – as is the whole FOS system – to appease complainants.”