PPI revolt could exhaust FOS reserves in six weeks

Laura Miller
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Firms' refusal to pay their case fees to the FOS until the outcome of a judicial review into PPI mis-selling could exhaust the Ombudsman's reserves in six weeks and force it to raise its industry levy by as much as 25%.

FOS says it expects the number of cases for the year to March 2011 to be 7% higher than last year, but within this total figure, PPI cases have risen by almost 40%. However some firms are refusing to co-operate with the FOS until the outcome of a judicial review into PPI misselling by the British Bankers Association (BBA). FOS says such a revolt would send its income plummeting, and could derail the organisation's whole operation. Loss of income from case fees in just one month could lead to an operating monthly deficit of up to £4m for the FOS, which would exhaust its reserve...

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