The Financial Ombudsman Service has said it expects over 181,000 consumer complaints across the next financial year.

The organisation predicts a continued rise in disputed transactions over the next 12 months, driven by the increasing volume of financial fraud and scams.

It also expects cost-of-living pressures to lead to an increase in irresponsible and unaffordable lending complaints, as well as a rise in account closure complaints prompted by higher public awareness of the issue.

Motor insurance complaints will continue at a high level, partly due to widescale delays in being able to repair vehicles and the impact of second-hand car market on valuations, added the Ombudsman.

Additionally, there will be further complaints about car finance commission arrangements which will be considered in light of changes made by the FCA to complaint handling rules in this area, it said.

The comments come as the organisation launches a consultation paper on its plans and budget.

Over the next financial year it has set itself a new target of resolving 90 per cent of cases within five months.

The consultation also sets out plans to reduce the cost of the service to industry in the year ahead. It proposes to reduce the case fee by £100 per case to £650 and reduce its compulsory and voluntary jurisdiction levies on businesses.

The service is also seeking feedback on proposed new charges for professional representatives for bringing cases to the Financial Ombudsman Service.

It is calling for views on whether and how a charging regime might be implemented, including on the level of any fee itself; the impact on complaint volumes, the potential impact on different groups of complainants, and the lead time required for businesses and professional representatives to be ready.

“Given cost-of-living pressures it’s imperative that, now more than ever, consumers understand their finances and are treated fairly and transparently by financial service providers," said Abby Thomas, chief executive and chief ombudsman of the Financial Ombudsman Service. “Looking ahead we know our service will see a high level of complaints and that those disputes will likely focus on the critical issues that impact people’s everyday lives. This includes perceived unaffordable lending, mortgages and complaints about people’s savings and current accounts."

Thomas continued: “We are planning to be more ambitious next year, resolving complaints more quickly and improving the service we offer. At a time when all businesses are facing financial pressures, we are also reducing the cost of our service to industry.”

The consultation is open until 30 January 2024.

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