Banking complaints hit 10yr high

The Financial Ombudsman Service publishes annual review of personal finance disputes.

The Financial Ombudsman Service – the independent organisation that settles disputes between consumers and financial companies – today publishes its annual review covering the 2010/11 financial year.

The review shows that during the year:

- the ombudsman handled over a million front-line enquiries and complaints from consumers – around 4,000 each working day

- around 1 in 5 of the initial consumer enquiries we received turned into a formal dispute requiring the involvement of our adjudicators and ombudsman – a record 206,121 new cases, up 26% on the previous year

- 51% of the new cases were about the sale of payment protection insurance (PPI) with the number more than doubling to 104,597 – the highest number ever received in a year about a single financial product

Natalie Ceeney, chief executive and chief ombudsman, said:

“This year has been the busiest in our ten-year history – with over 200,000 disputes referred to us and a million front-line enquiries. This reflects the increased confidence of an ever more diverse range of consumers getting in touch about a wider range of problems and issues.

“Aside from PPI cases, over the year we’ve seen encouraging signs of improvements in the way that some businesses are handling complaints – and it’s good to see that the number of disputes about some other financial products has now started to fall.”

Statistics from the ombudsman’s annual review show:

- the number of investment complaints dropped by 30% and banking complaints fell by 9%

- the ombudsman resolved almost half of all disputes (apart from PPI) in three months and three quarters within six months

- the ombudsman’s involvement resulted in compensation for consumers in 51% of cases

- complaints about consumer credit, travel insurance and motor insurance increased, while complaints about health insurance, current accounts and home contents insurance fell

- half of the total number of disputes referred to the ombudsman service involved four of the UK’s largest financial services groups – while 2,131 businesses had just one complaint each

- 78% of adults said they were aware of the Financial Ombudsman Service – with awareness of the ombudsman highest in the Wales and lowest in Northern Ireland

Sarah Brooks, Head of Financial Services at Consumer Focus said:

‘The FOS is to be commended for helping with so many consumers’ complaints this year. The banks’ battle to dodge its PPI responsibilities has damaged the industry’s reputation, tied up the Ombudsman’s resources and worst of all left consumers out of pocket and out of patience.

“We now urge banks to deal promptly with PPI complaints so consumers are not forced to go to the Ombudsman and a line can be drawn under the whole sorry affair.

“A decrease in wider complaints is to be welcomed and we hope this marks the start of banks improving their service and getting things right in the first place. However, half of complaints relate to just four big groups so customers may want to bear service in mind when they choose their bank.

“Customers would be better able to make informed choices if they could see how many complaints a bank had received broken down by product – we are calling on the industry to provide this information.

“Over half of complaints the Ombudsman deals with get financial compensation proving that persistence pays in the end. If people think their bank has treated them unfairly, they should always consider taking their case to the Ombudsman for an independent review.”

Which? executive director, Richard Lloyd says:

“There is clearly a serious problem with complaints-handling in the financial services industry. Never before has the Ombudsman’s role been so vital – the Government must resist any pressure from the industry to weaken it.

“The fact that over 200,000 people a year are now having to refer their complaint to the Financial Ombudsman Service – the last port of call – shows that banks and insurers are simply not taking complaints-handling seriously enough.

“In the very worst cases, firms are seeing more than 90% of cases that go to the Ombudsman being upheld – clear evidence they do not understand the meaning of treating customers fairly.”

Source: www.myintroducer.com