28May

The Financial Ombudsman Service (FOS) annual review for the 12 months to March 31 2015 reveals that there have been significant falls in complaint numbers in some product areas, but that for other products, volumes have soared.

The FOS, which resolves complaints where a financial firm and a customer cannot reach agreement, received 329,509 new complaints in the 12 month period, down 36% on the previous year. 204,943 of these concerned payment protection insurance (PPI), which is only just over half the number received in 2013/14, however the product still accounts for 63% of the organisation’s workload, and PPI complaints can still take many months or even a few years to resolve.

The largest increase in complaint volumes concerned packaged bank accounts, where the number of cases rose almost fourfold to 21,348. These types of account also accounted for more complaints than any product other than PPI. Other areas showing significant increases in complaint numbers include credit broking (up 87% to 1,213), payday loans (up 46% to 1,157), debt collecting (up 51% to 843) and debt counselling (up 47% to 140).

Complaints about packaged bank accounts often involve clients saying they were given a packaged account without their knowledge or consent, or that they are unable to claim on many of the associated insurance products.

Credit broking complaints might concern customers having fees taken from them by brokers who never managed to arrange a loan, or being charged multiple fees as their details were passed on to numerous other brokers, or being misled into believing that the firm they were dealing with was actually a lender.

Many of the payday loan complaints concerned creditworthiness assessments and use of continuous payment authority.

Debt collection complaints were often about chasing the wrong person for a debt, or exhibiting behaviour that customers believed to constitute ‘harassment’.

Complaints about fees and charges and the way these were communicated to customers continue to dominate the debt counselling complaints.

PPI still accounts for 88.5% of complaints referred by claims management companies (CMCs), with packaged bank accounts making up a further 8%.

As many as 6% of the complaints received were classed as ‘frivolous or vexatious’ by the FOS, meaning that they never had any real prospect of success. CMCs were responsible for submitting many of these.

The FOS resolved 448,387 complaints in 2014/15, and found in the customer’s favour in 55% of cases. However, for some products the uphold rate was significantly higher, such as card protection insurance (85%) and PPI (62%).

The press release accompanying the review also looks back on the 15 years the FOS has been in existence. In that time it has received 2.8 million complaints, of which 1.3 million concerned PPI and a further 500,000 related to mortgage endowments or bank charges.

Chief ombudsman, Caroline Wayman, commented:

“The world has moved on and changed significantly since I first joined the ombudsman as an adjudicator in 2001. Yet our workload over the last 15 years has been constantly dominated by the past – clearing up the fall-out of the mass claims and mis-selling scandals of the last decade and a half.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.