Ombudsman handles record number of complaints

The Financial Ombudsman Service's (FOS) annual review shows it handled a record 794,648 consumer enquiries and 123,089 new complaints in the 2007/8 financial year.

The figures from the independent organisation that settles disputes between consumers and financial companies represent a 30% increase from the previous year.

The number of mortgage and banking disputes have tripled and insurance disputes have doubled. However, complaints about mortgage endowments fell by 70%.

The FOS 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 FOS had no complaint referred to the service during the year.

Sir Christopher Kelly, chairman of the FOS, 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 FOS 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.

“But the picture is mixed - and the continued slow-down in the number of disputes referred to us about health insurance, travel insurance and some investment products is very welcome - especially where this follows specific initiatives by the industry sectors involved to improve standards of complaints-handling.

“It is also good news to see the diversity of consumers who use the FOS continuing to broaden, reflecting the wide range of financial services and products we cover, from pensions to pet insurance, direct debits to debt collecting. Making our service accessible to everyone is a top priority identified by Lord Hunt in his recent review of the openness and transparency of the FOS.”