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 for the 2008/09 financial year. The review shows that during the year, the ombudsman:

• Handled 789,877 consumer enquiries and a record 127,471 new complaints.
• Resolved 113,949 disputes – a 14% annual increase – with our involvement resulting in compensation for consumers in 57% of cases.
• Saw the number of complaints about mortgages, credit cards and consumer credit rise by 34%, and insurance disputes increase by 84% – while complaints about mortgage endowments fell by more than half.

While half of the total number of disputes related to six of the UK's largest financial services groups – broadly in proportion to 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:

The financial world is a very different place now from a year ago – and the ombudsman, like everyone else, has been affected by the economic turmoil. For us it has involved dealing with a significant increase in the number of complaints arising from the impact of the worsening financial climate.

As businesses tighten their belts – and the credit crunch leads to increased financial difficulty for many consumers – we are gearing up to deal with further volatility in complaint volumes.

Statistics from the annual review show:

• A three-fold increase in complaints about payment protection insurance (PPI) – following a five-fold increase in the previous year.
• Complaints about motor, household and travel insurance rising – but complaints about health insurance levelling off.
• Complaints about investment bonds more than doubling – but pension complaints falling by 9%.
• 26% of cases referred on behalf of consumers by commercial claims-management companies (a 40% increase on the previous year).
• The proportion of complaints from "blue-collar" workers ("C1/C2") increasing by 17% – with complaints from people from professional backgrounds ("white-collar") falling by 18% in the last two years.
• 74% of adults said they had heard of the Financial Ombudsman Service – with awareness of the ombudsman highest in the North and South East and lowest in Northern Ireland.
• The average cost of resolving a dispute at the ombudsman service has fallen 4% year-on-year to £508.

annual review 2008/09 [PDF opens in new window]