The Financial Ombudsman Service is set to make 150 redundancies, despite its complaints backlog continuing to grow, Mortgage Strategy sister magazine Money Marketing has learned.
FOS has entered a consultation period for the proposed job cuts, which is expected to end on 21 April 2021.
Staff at all levels will be affected, including management positions in its mass claims and transitions teams.
A spokesperson said the redundancies are tied to the reduction of FOS’s work on payment protection insurance complaints.
“The FOS is a customer-led organisation and the size and shape of our service needs to reflect the demand to ensure we provide a cost-effective service,” the spokesperson said.
“We have consistently said that we expect the size of the organisation to reduce as our work on PPI comes to an end following the FCA’s August 2019 deadline to complain.
“We are now consulting staff on the next stage of that process and will continue to work with staff and their representatives going forward.”
Meanwhile, Money Marketing understands that FOS is also potentially introducing salary caps which could reduce wages for some staff bands.
This news comes as FOS chief executive Caroline Wayman quit following pressures amid mounting unresolved complaints.
Last year, FOS said it received 40 per cent more complaints in the first six months of the year than originally forecast.
However, some argue that the FOS’s backlog is down to its change in model five years ago where everyone began working on all types of cases rather than specific areas being assigned to specialist teams.
The FOS said at the time that this was designed to resolve complaints quicker and ensure queues do not build up for specialist ombudsmen to deal with them.
Yet a person close to the matter told Money Marketing that this model is “doomed to fail” and staff are often forced to research information online to understand terms and issues when dealing with complaints.
The individual said that those who did not buy into the new model were moved to focus on PPI cases, the area where FOS is looking to make staff redundant.
