Financial Ombudsman Service annual review of personal finance disputes

The Financial Ombudsman Service - the independent organisation that settles disputes between consumers and financial companies - has published its annual review for the 2007 / 08 financial year. The review shows that during the year, the ombudsman:

• Handled a record 794,648 consumer enquiries and 123,089 new complaints - a 30% annual increase.
• Saw the number of mortgage and banking disputes more than triple, and insurance disputes double - while complaints about mortgage endowments fell by 70%.
• Settled 99,699 disputes - with the proportion of complaints upheld in favour of consumers ranging from 16% to 84%, depending on the financial product or service involved.

While half of the total number of disputes related to six of the UK's largest financial services groups - broadly reflecting the amount of business they carry out with consumers - more than 95% of businesses covered by the ombudsman service had no complaint referred to the service during the year.

Sir Christopher Kelly, chairman of the ombudsman service, said, "This time last year we had hoped we were starting to see a downward trend in complaint numbers for the first time. But instead, events during the year have led to the ombudsman service receiving record numbers of new cases.

"The sudden surges in banking and insurance disputes this year have meant that predicting, managing and dealing with complaint volumes has been more of a challenge for us organisationally than ever before."

Perhaps predictably, complaints about issues in the headlines jumped sharply - there was a ten-fold increase in complaints about charges on current accounts - relating to the legal test case in the High Court involving the Office of Fair Trading (OFT) and eight current-account providers - and a six-fold increase in complaints about payment protection insurance (PPI) - with most complaints now relating to how policies were sold (rather than complaints about rejected claims).

But the report says the picture is mixed with a continued slow-down in the number of disputes referred about health insurance, travel insurance and some investment products, notably where it has followed specific initiatives by the industry sectors involved to improve standards of complaints-handling.

28 May 2008 © Moneyextra.com

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