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Consumers caught up in the recent NatWest/ Royal Bank of Scotland computer meltdown had better hope their bank offers no-quibble refunds or they face an 18-month wait if they have to take their case to the Financial Ombudsman Service. Guardian Money has been told the organisation is still beset by long delays that have seen some claims take four years to resolve. This week, one small campaigning organisation from Nottingham which is in dispute with Lloyds TSB was told it would be at least another 12 months before an ombudsman would look at their case, four months after they first applied to the service. Part of the problem is that banks and other financial firms are increasingly appealing the initial rulings made by the FOS, which is adding to the delays caused by a tidal wave of payment protection insurance (PPI) claims that has swamped the service. There are even some unsubstantiated claims that the banks are using the long delays to persuade customers to settle disputes rather than take their complaint any further. The FOS was originally set up to provide a speedy and cheap way to resolve disputes between financial companies and their customers without having to go to court. Anyone who has reached deadlock in a dispute with a bank, insurance company or other finance firm, can apply for independent arbitration. The firm is bound by the FOS's findings and has to pay a £500 fee (£850 for PPI cases) for every complaint. It is still free for the consumer, although some argue that people should have to pay a reclaimable fee to put off frivolous claims. Last September the FOS told Money it was taking on an extra 300 staff to help bring down waiting times. At the time we reported how readers were facing long waits for an ombudsman to examine their case, and while things may have improved slightly, the FOS admitted this week that the delays some people face were "unacceptable" – even for non-PPI claims, which have been separated out. Some consumers say the excuses are starting to wear a bit thin, as delays go back as far as 2010. Others question whether the FOS needs a complete overhaul in the face of ongoing PPI claims, and the banks becoming more adversarial with customers. Some of those posting on web forums report having to wait several months for an adjudicator to be allocated to their non-PPI case, and being told to expect to "wait even longer, as it is a free service". One poster on the MoneySavingExpert forum reports how their home insurance dispute is still ongoing four years after it was first submitted to the FOS. The service says that despite speaking regularly to the financial industry, for the past two years it has received 25% more complaints than even its highest estimates predicted. "The good news is we're seeing a steady increase in the complaints we're able to sort out early on, as more expert staff on the ground are able to resolve matters. But, increasingly, more and more consumers and businesses are requesting a final decision from an ombudsman, rather than accepting our proposals to sort out the complaint," a spokesman says. In its recent annual report, the FOS said 63,000 of the 264,000 new cases seen last year would require an ombudsman. The report shows its senior ombudsmen resolved just 20,500 cases last year. "As a consequence, our main focus in the last few years has been ensuring that we recruit and train ombudsmen with the right skills, knowledge and qualifications to deliver decisions that not only involve complex and hard-fought subjects, but are legally binding," the spokesman says. He concedes the organisation is concerned it could be hit by a new wave of complaints from thousands of non-NatWest/RBS customers left out of pocket by the recent payments fiasco. An investigator who regularly deals with the banks told Money that staff appear to "delight" in telling customers with whom they are in dispute how long it will take the FOS to look at their complaint. "FOS staff will always talk to you to explain what's going on. The trouble is, they are dealing with banks that do everything to drag matters out and make it as difficult as possible," says Richard Emery of 4Keys International. MoneySavingExpert, Martin Lewis, says he has a great deal of sympathy for the FOS as it has unwittingly been caught up in a PPI furore, for which it was never intended. "It's an institutional problem, and the simple truth is that the service is struggling to recruit and maintain enough qualified staff. It must be remembered at the same time they've been trying to ramp up numbers to deal with PPI, the banks are doing the same thing, trying to hire huge numbers from the same group of people to work in their own PPI operations – and the banks have deeper pockets. The issue here is it was never foreseen this would get so big, and there's billions more still to be paid out," he says. More: http://www.guardian.co.uk/money/2012/jul/06/financial-ombudsman-swamped-ppi-complaints