By Chris A'Court
BBC Radio 4's Money Box
Staff settling consumer disputes at the Financial Ombudsman Service are being paid bonuses to close complaints quickly, due to a record number of cases.
Walter Merricks leads the Financial Ombudsman Service
The revelation has surprised consumers and their representatives, and may raise questions over the quality of some assessments.
The free service is meant to fairly resolve deadlocked disputes between individuals and financial firms and assess cases for compensation.
But it received 98,000 new complaints to deal with in the year up to the end of March 2004, a 57% annual increase.
Chief Financial Ombudsman Walter Merricks confirmed that his 600 adjudicators can boost their salaries if they close more cases than they are targeted to achieve.
Speaking to BBC Radio 4's Money Box Investigates he said: "We allow staff to build up slightly increased earnings if they do slightly more cases."
Defending the pay policy, he said it is part of how the organisation seeks to combine fairness with efficiency while dealing with its ever increasing workload.
Mr Merricks told the programme it was an appropriate policy for staff used to working in a financial environment:
"If they achieve those targets, and achieve a lot on top of them, they do feel that it is not unreasonable to expect that the organisation rewards them for that."
Fighting for Fairness
Money Box Investigates: Fighting for Fairness was broadcast on Tuesday, 13 April, at 2002 BST on BBC Radio 4.
But Mick Mcateer, Policy Advisor to the Consumers Association was critical of the system.
He told the programme: "It would be much better if the ombudsman had sufficient resources, and the staff were well paid enough, not to have to rely on targets and bonuses to actually boost their salaries.
"We think that would give them more space and more freedom to actually assess cases better."
BBC Radio 4's Money Box Investigates was broadcast on BBC Radio 4 at 2000 BST on Tuesday, 13 April, 2004.