03Nov

The latest Annual Report from the Financial Ombudsman sees the organisation admit that it received many more complaints than forecast.

The Financial Ombudsman Service has published its Annual Report for the financial year ended March 31 2021, and it shows that the Service received more complaints during this period than it managed to resolve. New cases in 2020/21 totalled 279,146, compared to the 249,144 that were settled.

170,648 (61%) of the new complaints were in the banking and credit arena, and here only 111,356 cases were resolved during the year.

New complaints about products other than payment protection insurance totalled 237,000, which is 60% more than the 145,000 the FOS had predicted. It received 74% more banking and credit complaints than expected, and 67% more pension and investment complaints.

31% of all complaints, and 40% of complaints about products other than PPI, were upheld by the FOS during the year. 87% of complaints were resolved using the FOS’s “informal view” approach.

Staff retention levels within the organisation have improved, from 87.8% in 2019/20 to 89.9%. The report says that 78% of the public trust in the Financial Ombudsman, which is 1% higher than the figure the Service is aiming for here.

However, the last financial year saw the FOS fail to meet its internal objectives in a number of areas:

  • 72% of firms’ complaint handlers rated the service positively (the aim was for 80%, and the FOS achieved 77% on this measure in 2019/20)
  • 54% of consumers said they were satisfied with the service they received (aim 65%, 2019/20 figure 57%)
  • 90% of complaints more than 12 months old had been resolved by the end of the financial year (the aim here is for 95%, and the same 90% figure was recorded during the previous year)
  • Only 50% of complaints were allocated to a case handler within 28 days (aim 100%)
  • 36% of complaints were resolved within 28 days (aim 50%)

Of the 2020/21 complaints, 44% were resolved within three months, 70% within six months, 81% within nine months and 87% within 12 months.

61% of managers at financial firms agreed with the statement “The financial services industry can have confidence in the Financial Ombudsman”, down from 74% in 2019/20.

Possibly due to the decline in PPI complaints and the rise in cases concerning other product areas, 2020/21 saw a significant change in the socio-economic background of the people who complained to FOS. In the year to March 2021, 56% of those contacting the organisation were from the AB groups (Professional and managerial), compared to 37% in the previous year. 39% of 2020/21 complainants were from the C1 and C2 groups (Skilled and semi‑skilled), when members of these groups had made up 55% of 2019/20 customers.

The age groups most likely to complain are the 45-54s and the over 65s, each being responsible for 23% of the annual complaints total.

53% of consumer credit complaints, 66% of PPI complaints and 60% of packaged bank account complaints during 2020/21 were made by a claims management company or by someone else other than the original customer. However, 93% of complaints in all other product areas were submitted by the customer themselves.

As for the current financial year, 2021/22, during this period the FOS expects to receive 170,000 complaints and to resolve 220,000.

FOS chair Baroness Zahida Manzoor said:

 We have been through some previously unimaginable challenges. The Financial Ombudsman can be proud of how it has continued to serve its customers: our people showed steadfast commitment to securing fair outcomes for consumers and businesses navigating the pandemic – while dealing with its impact on their own lives.

As we move beyond PPI, we are determined to ensure customers can continue to access the Financial Ombudsman easily and get answers more quickly. And we need to be a modern and agile service, one able to adapt to changing demand and new and emerging issues.

FOS interim chief executive Nausicaa Delfas blamed Covid-19 for some of the less impressive performance figures, saying:

The last year has been unprecedented. The impact of Covid-19 was profound: we received over 60% more non-PPI complaints than we were resourced to handle. The pandemic also caused operational difficulties across the industry, leading to delays in getting the information we needed to resolve complaints.

At Scott Robert we understand that not having the required processes and controls in place can easily lead to an increase in complaints, upheld complaints and potentially paying out large amounts of redress to customers. We have experts available to review and offer advice over your complaint handling processes and controls in place to minimise the risk. We can also assist in reviewing complaints, conduct investigations, draft final responses and working collaboratively with your business and Complaints Officer(s) to resolve complaints.

Speak to one of our experts today to find out more by calling 0161 914 5727.