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ombudsman service publishes annual review of personal finance disputes

28 May 2008

The Financial Ombudsman Service - the independent organisation that settles disputes between consumers and financial companies - today publishes its annual review for the 2007/08 financial year. The review shows that during the year, the ombudsman:

  • Handled a record 794,648 consumer enquiries and 123,089 new complaints - a 30% annual increase.
  • Saw the number of mortgage and banking disputes more than triple, and insurance disputes double - while complaints about mortgage endowments fell by 70%.
  • 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 ombudsman service had no complaint referred to the service during the year.

Sir Christopher Kelly, chairman of the ombudsman service, 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 ombudsman service 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 ombudsman service 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 ombudsman service.

Other statistics from the annual review show:

  • A ten-fold increase in complaints about charges on current accounts - relating to the legal test case in the High Court involving the Office of Fair Trading (OFT) and eight current-account providers.
  • A six-fold increase in complaints about payment protection insurance (PPI) - with most complaints now relating to how policies were sold (rather than complaints about rejected claims).
  • Complaints about motor and household insurance rising - but complaints about travel and health insurance falling.
  • Complaints referred to the ombudsman service from consumers aged under 35 doubling during the year - reflecting our outreach and awareness-raising work with younger people.
  • 40% of consumers first hearing about the ombudsman through the media; and more than half feeling that the existence of the ombudsman increased their confidence in financial services.

annual review 2007/08 [PDF opens in new window]

media enquiries

  • David Cresswell – phone 020 7964 0134
  • Emma Parker – phone 020 7964 0966
  • out of hours – phone 0771 8658 306

image: annual review

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