The power to settle financial complaints.
The power to settle financial complaints.
1 April 2011 to 31 March 2012
| financial services sector | % |
|---|---|
| banks | 65.5 |
| general-insurance intermediaries | 9.5 |
| general insurers | 8 |
| life insurance and investment product-providers | 5 |
| mortgage intermediaries | 3.5 |
| building societies | 3.5 |
| businesses with a consumer-credit licence | 2 |
| independent financial advisers (IFAs) | 1 |
| other (including fund managers and stockbrokers) | 2 |
The overall proportion of disputes relating to banks remained the same as the previous year – at 65.5% of all cases. This continued to reflect the volume of complaints about payment protection insurance (PPI) during the year. The proportions of cases involving general-insurance intermediaries and mortgage intermediaries also remained identical to the previous year.
The proportion of cases involving building societies rose from 2% to 3.5%. But cases relating to independent financial advisers (IFAs) continued to decrease – from 1.5% to 1% – reflecting the steady decline in the number of complaints to the ombudsman service about investments and pensions.
These tables show how new complaints involving the products most frequently complained about to the ombudsman service were spread across the different sectors of the financial services industry.
| complaints about payment-protection insurance (PPI) | % |
|---|---|
| banks | 75 |
| insurance intermediaries | 15 |
| general insurers | 4 |
| building societies | 2 |
| other | 4 |
| complaints about general insurance (excluding PPI) | % |
|---|---|
| general insurers | 63 |
| insurance intermediaries | 17 |
| life insurance & investment product-providers | 9 |
| banks | 7 |
| Society of Lloyd’s | 1 |
| other (including cash-plan health insurers) | 3 |
| complaints about banking and credit | % |
|---|---|
| banks | 78 |
| mortgage intermediaries | 8 |
| businesses with a consumer-credit licence | 7 |
| building societies | 2 |
| other | 5 |
| complaints about mortgages | % |
|---|---|
| banks | 65 |
| mortgage intermediaries | 17 |
| building societies | 7 |
| IFAs | 3 |
| other (including non-bank mortgage providers) | 8 |
| complaints about investment products | % |
|---|---|
| life insurance and investment product-providers | 47 |
| banks | 26 |
| independent financial advisers (IFAs) | 11 |
| stockbrokers and fund managers | 4 |
| building societies | 2 |
| other (including friendly societies and credit unions) | 10 |
| complaints about pensions | % |
|---|---|
| life insurance and investment product-providers | 56 |
| independent financial advisers (IFAs) | 21 |
| banks | 8 |
| other (including building societies and stockbrokers) | 15 |
In this annual review we show the outcome of complaints in relation to the financial products we receive most complaints about. For these products, the proportion of cases we upheld in favour of consumers ranged from 28% to 82%.
We also refer to the six-monthly sets of data published on our website – relating to the 160 or so individual businesses that together generate around 90% of our complaints workload. This data shows the number of new complaints – and the proportion of complaints we upheld in favour of consumers – for each of these businesses. This uphold rate varied substantially from business to business during the year – from 2% to 98%.
The table below shows the outcome of cases in the financial year 2011/2012 – by sector.
Customers of over 100,000 businesses that provide financial services have the statutory protection of the Financial Ombudsman Service, should a dispute arise. This includes:
These businesses range in size from global financial services groups to sole traders providing credit as a sideline to their main business. This range in size is reflected in the number of complaints we receive about the different businesses we cover – which followed a very similar pattern during the year to previous years.
In the financial year 2011/2012, fewer than 5% of the total number of businesses covered by the ombudsman service had complaints referred to us.
Four of the UK’s largest financial services groups accounted for 138,848 cases (52.5% of all the complaints we received). At the other end of the scale, 182 cases (0.1% of all complaints) related to friendly societies (124 in the previous year) and 79 complaints involved credit unions (30 in the previous year).
During the year we published complaints data showing the number of new cases, and uphold rates, for each of the 160 or so financial businesses that together generate some 90% of our workload.
3,278 businesses – out of the 4,475 in total that had complaints referred to the ombudsman service during the year – had fewer than four complaints. This meant that 73% of businesses with complaints referred to the ombudsman service paid no case fees (74% in the previous year) – as again we did not charge for the first three complaints during the year.
In January 2012 we launched a public consultation on proposals for new case fee arrangements which would come into effect from April 2013. These proposals would involve:
We carry out regular surveys on how the businesses we deal with rate the level of service we provide. These surveys cover all sectors of the financial services industry, ranging from sole-proprietor businesses to the largest financial groups.
| % who agree | % who express no view | % who disagree | |
|---|---|---|---|
| the financial services industry can have confidence in the ombudsman service | 49 | 28 | 23 |
| our service is good value for businesses who pay the levy/case fees that fund us | 40 | 34 | 26 |
| our decisions on cases are fair and unbiased | 52 | 21 | 27 |
| our decisions are consistent | 42 | 28 | 30 |
| we provide a good dispute-resolution service for businesses | 57 | 28 | 15 |
On average, the overall proportion of businesses agreeing with these statements about our service rose slightly during the year – from 46% to 48%. The proportion agreeing with three of the five statements increased – most significantly, those agreeing that our decisions are consistent (rising from 36% to 42%).
More businesses also said that we are good value – with 40% agreeing this, compared with 35% in the previous year. This may reflect the findings of the National Audit Office (NAO) who reported on our efficiency in January 2012. It may also reflect our new proposals for changing our case-fee structure for businesses. These proposals – which would mean that only 1% of businesses paid case fees in future – were given a broadly positive welcome when we published our consultation paper in January 2012.
On the other hand, the proportion of businesses agreeing that our decisions are fair and unbiased slipped back during the year – from 55% to 52%. This may reflect the significant increase in the proportion of cases we upheld during the year in favour of consumers rather than businesses (rising to 64% from 51% in the previous year).
However, half of businesses still agreed our decisions are fair and unbiased. This suggests that the way businesses rate the fairness of our service may not be entirely determined by the outcome of complaints.
Around three out of ten businesses were still unable or unwilling to express views on issues widely considered to be of key interest to the financial services industry – most significantly, on whether our service provides value for money.
In this annual review we highlight some of the external-liaison work we have carried out during the year with the financial services industry – including training and guidance on complaints-handling and the work of our technical advice desk in supporting businesses on complaints prevention.
During the year we recorded feedback from businesses on what they think about the ways in which we share information with them about our work settling disputes – and which one of our external-liaison support services they most value.
| which of our support services do businesses value? | % |
|---|---|
| our website (including our online technical resource) | 29 |
| our technical advice desk | 28 |
| ombudsman news | 20 |
| other publications (including our quick guides for businesses) | 14 |
| events and seminars | 9 |
| what the questions to our technical advice desk related to | % |
|---|---|
| our approach to insurance complaints | 33 |
| our approach to banking & credit complaints | 32 |
| our casework procedures | 16 |
| our approach to payment protection insurance (PPI) | 13 |
| our approach to investment complaints | 6 |
Our technical advice desk handled 19,281 enquiries from professional complaints handlers during the year – a 15% increase on the previous year. 83% of these calls were from businesses and 11% from community workers and consumer advisers. The other enquiries were from a range of users and stakeholders including researchers and trade associations.
During the year, 71% of people who used the technical advice desk said they were “very satisfied” with the service – with an overall satisfaction rate of 98%. In response to feedback from the survey, we extended the opening hours of the technical advice desk by two hours each day.
For smaller businesses, we also have an outreach team who work closely with trade associations and networks both nationally and regionally. Our outreach team run our introduction to the ombudsman seminars, where smaller businesses – who are otherwise less likely to have direct contact with us – can meet us and ask the ombudsman questions face-to-face.
During the year we met smaller businesses at events we hosted across the UK.
90% of the smaller businesses who took part in one of these events said that it had given them a better understanding of complaints handling and the role of the ombudsman – which would change the way they approached customer complaints in future.
For the 16 financial services groups that together accounted for the majority of complaints referred to the ombudsman service during the year, we run a tailored relationship-management programme. This includes establishing constructive relationships between ourselves and the businesses concerned, at both operational and strategic level, to ensure that the significant caseloads involved are managed as effectively and efficiently as possible.
… this involves constructive relationships at both operational and strategic level
As well as the regular contact we have with businesses and their trade associations at this operational level, we have also always had more formal arrangements in place for strategic dialogue with the financial services industry.
Following consultation with industry stakeholders during 2010, we replaced the three sectoral liaison-groups (for banking, insurance and investment) – that had provided a channel for more formal communication between the ombudsman service and the industry since 2000 – with a small cross-sector industry steering group and a wider cross-sector industry panel.
The high-level steering group is chaired by our chairman and includes 16 chief executives of key financial services institutions. At meetings of this group – and in other high-level industry meetings – we have discussed strategic issues such as major trends in complaints and our funding mechanism. Minutes of the various meetings of the steering group are available on our website.
Membership of the wider cross-sector industry panel includes 200 financial services practitioners and officials from 30 trade associations. We keep in regular contact with the industry panel through a fortnightly email newsletter and a series of events, including meet the ombudsman Q&A sessions and specialist seminars on complaints-related topics (for example, on PPI and on the quality of goods bought with credit).