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annual review of 1 April 2001 to 31 March 2002 key facts and figures

dealing with complaints at the early stages

The Financial Ombudsman Service handles consumers’ complaints that financial firms have not been able to resolve themselves. Our general message to consumers is that they should always take their complaint to the firm first - this resolves many complaints without any need for our direct involvement.

initial enquiries
from consumers
year ended
31 March 2002
year ended
31 March 2001
year ended
31 March 2000*
phone enquiries
242,168
259,848
175,000
written enquiries
146,071
154,874
130,094
total
388,239
414,722
305,094
complaints referred on to our case-handling teams
43,330
31,347
25,000

* Complaints prior to April 2000 were handled by the separate complaints-handling schemes, before they came together as the single ombudsman service. The former separate schemes used different methods of recording statistics, so these figures are necessarily estimated.

The message appears to be getting across. The number of initial enquiries we have received from consumers has fallen slightly this year as - increasingly - consumers are giving firms the chance to put things right before approaching the ombudsman. In the past, a significant number of enquiries went to the ‘wrong’ complaints-handling scheme - as consumers phoned or wrote around, trying to find where they should go with their dispute. This problem has been eliminated now that we are a single ombudsman service, covering complaints previously dealt with by eight separate schemes.

An increasing number of consumers are also seeking the information they want directly from our website, rather than phoning or writing to us. We are now getting over 25,000 online visits a month.

Where consumers contact the ombudsman service before raising their complaint directly with the firm, our customer contact division forwards the complaint to the firm and asks it to investigate the matter under its formal complaints procedure. We remind consumers that, if the firm is unable to resolve their complaint within eight weeks, then they can ask us to get involved directly.

Our customer contact division provides a ‘single point of entry’ for all consumer enquiries - referring new complaints to firms where appropriate and giving general advice and guidance. It also gets involved at the initial stages of the ombudsman process, actively looking for opportunities to resolve simpler complaints (for example, those which have arisen through misunderstandings or administrative errors - where matters can be put right quickly, sometimes with just a few phone calls).

For complaints where further dispute-resolution work is needed - through conciliation, or investigation and adjudication - our customer contact division acts as the gateway to our specialist case-handling teams.

complaints referred on to our case-handling teams

In the year ended 31 March 2002, our customer contact division referred 43,330 new cases to our case-handling teams for more detailed dispute-resolution work - a 38% increase on the previous year (and 14% more cases than we had estimated in our budget).

new cases by subject matter
year ended
31 March 2002
year ended
31 March 2001
endowment policies linked to mortgages
14,595
9,067
personal pension plans
5,881
3,363
mortgage loans
(including 575 complaints about ‘dual’ variable rate mortgages)
3,876
2,499
whole-of-life policies/non mortgage-linked endowments
3,647
2,545
other ‘packaged’ investment products
(including 1,044 complaints about PEPs; 362 complaints about single premium investment bonds; 337 complaints about unit trusts; and 329 complaints about non-cash ISAs)
2,858
2,111
motor insurance
1,609
1,989
current accounts
1,280
793
savings and deposit accounts
(including 58 complaints about cash ISAs)
1,230
1,679
buildings insurance
985
927
travel insurance
884
778
other banking services
803
518
contents insurance
780
868
stockbroking
620
843
other lending (unsecured loans etc)
556
442
loan protection insurance
513
711
permanent health insurance (PHI)
504
- *
portfolio and fund management
449
485
critical illness insurance
408
- *
other types of insurance (including 79 complaints about pet insurance and
48 complaints about caravan insurance)
396
377
credit cards
372
222
extended warranty insurance
335
366
private medical insurance
277
194
free-standing AVCs
198
169
legal expenses insurance
135
152
personal accident insurance
81
197
derivatives
58
52
43,330
31,347

* separate figures for these categories of complaint were not shown in earlier annual reports published by the former ombudsman schemes.

The chapter overview of complaints trends gives more details and background information about the main types of new cases we received during the year.

Given the very wide-ranging nature of complaints we handle - from pet insurance to spread-betting - we have not included individual case studies in this annual review. The limited space in this document means we are unable to give a fair and representative overview of all aspects of our work.

However, we include case studies in our regular publication, ombudsman news, which provides feedback on recent complaints trends, as well as commentary and briefing on our approach to different types of complaint. We hope that firms find ombudsman news a helpful source of reference - and that they will take its contents into account when considering how to handle complaints. To join the ombudsman news mailing list, please contact our communications team (phone 020 7964 0092).

In order to present information in this annual review as consistently as possible across all types of complaint, certain statistics that were previously included only in some annual reports of the former complaints-handling schemes are no longer continued in this document. We have also had to estimate some figures relating to earlier years where the separate complaints-handling schemes used different methods of recording statistics, reflecting their individual powers and procedures. However, this data can be made available on request for research purposes.

outcome of cases

During the year we have put an increasing focus on using mediation and conciliation to resolve as many complaints as possible at the earlier stages. This can be quicker and more efficient than a formal investigation which can sometimes be quite a drawn-out process.

Where mediation is not appropriate, or does not resolve the matter satisfactorily, we usually begin a full investigation, carried out by one of our case-handlers. But even at this stage, conciliation may still be possible - especially if previously unknown facts emerge.

Otherwise, the case-handler involved will usually issue an adjudication, setting out our recommendations about whether the complaint should be upheld. In most cases, both sides accept these recommendations. But either side can instead ask for a review and final decision by an ombudsman.

outcome of cases

year ended
31 March 2002

year ended
31 March 2001*

resolved by mediation or conciliation
45%
40%
resolved after investigation
by a case-handler

40%

of which

  • 10% mixed outcome (partial win/lose for both sides)
  • 23% in favour of the consumer
  • 67% in favour of the firm
40%
resolved by the final decision
of an ombudsman

15%

of which

  • 15% mixed outcome (partial
    win/lose for both sides)
  • 29% in favour of the consumer
  • 56% in favour of the firm
20%

* Complaints for the year ended 31 March 2001 were resolved using the rules of the former complaints-handling schemes - before the new ombudsman rules came into force under the Financial Services and Markets Act 2000. The former schemes had different powers and procedures - as well as separate methods for recording the outcome of complaints. For these reasons, we have been unable to produce a single set of figures that is statistically comparable to the figures we now record to show the outcome of cases.

our budget and productivity

bar chart

number of cases resolved and closed

  • 2000 = 21,100
  • 2001 = 28,400
  • 2002 = 39,194

average number of cases resolved per week by each case-handler

  • 2000 = 3.1
  • 2001 = 3.3
  • 2002 = 3.75
bar chart

our unit cost*

* Our unit cost is calculated by dividing our total costs (before financing charges) by the number of cases we close. Total costs include the budgeted figure for depreciation, so as to remove any distortion arising from our depreciation policy.

  • 2000 = £730
  • 2001 = £753
  • 2002 = £684
our total costs
actual
year ended
31 March 2002
£ million

budget
year ended
31 March 2002
£ million

actual
year ended
31 March 2001
£ million
staff and staff-related costs
18.6
19.5
15.5
other costs
6.1
4.9
4.4
interest
0.7
1.1
0.6
depreciation
1.8
2.1
0.1
total costs
27.2
27.6
20.6

Our total costs for the year ended 31 March 2002 were £27.2 million, compared with a budget of £27.6 million. Our income for the year ended 31 March 2002 of £27.5 million was close to the budget. The surplus for the year of £0.3 million was transferred to reserves. The detailed financial statements are set out on pages 30 to 51 of this review.

who brings complaints to the ombudsman?

The ‘average’ customer of the ombudsman service is between 35 and 54 years old. This is perhaps not surprising, given that demographically this age group is likely to have wider levels of ownership of financial and investment products.

We are carrying out further research to see how ownership of financial products across the UK population as a whole compares with the patterns we see, in relation to people who bring complaints to the ombudsman service.

how old are people who complain to the ombudsman?

pie chart

where do people who complain to the ombudsman live?

pie chart

  • Northern Ireland = 2%
  • South East = 21%
  • Greater London = 12%
  • South East = 11%
  • North West = 10%
  • West Midlands = 9%
  • Yorkshire Humber = 9%
  • Scotland = 7%
  • East Midlands = 6%
  • North East = 5%
  • Wales = 4%
  • East Anglia = 4%

The geographical location of the people who use our service broadly reflects the overall population spread across the UK as a whole. Our research shows a variance of more than one or two percentage points in three regions only. People from East Anglia comprise 9% of the population but 4% of our customers. Conversely, people from the South West comprise 8% of the population but 11% of our customers. 21% of people who used our service came from the South East (home to 14% of the UK population). This appears to reflect the fact that there are proportionately higher levels of ownership of financial and investment products in the South East.

what gender are people who complain to the the ombudsman?

pie chart

A significant proportion of complaints we receive relate to policies and accounts held jointly. With joint accounts, the first-named is frequently male - and it is the first name that our system records. This may result in some bias in the data we record about the gender of people who complain to us.

  • female = 33%
  • male = 67%
getting our message across year ending 31 March 2002

Enquiries handled by our technical advice desk

(general guidance and advice on ombudsman practice and procedures - for professional complaints-handlers in firms and the consumer advice sector)

Our technical advice desk handled 16,271 technical enquiries (9,330 in the previous year), comprising:

  • 9,735 enquiries from financial services practitioners (3,712 in the previous year)
  • 5,593 enquiries from consumer advisers
    (4,237 in the previous year)
  • 943 calls from trade associations, researchers, official bodies etc (1,381 in the previous year)
roadshows We took part in 8 roadshows across the UK.
exhibitions

We took our exhibition stand to 15 national consumer and trade shows.

speeches and presentations at conferences etc We addressed 58 conferences, seminars etc.
workshops and visits to trading standards departments and citizens advice bureaux etc We visited 84 consumer advice organisations.
visits and training for firms We visited 250 financial services providers - from credit unions to investment banks - to explain the role of the ombudsman service.

industry meetings and seminars

We took part in 110 liaison meetings for groups of financial services practitioners - covering issues ranging from our budget and funding to EU initiatives.
media enquiries We received over 3,000 enquiries from newspapers, magazines and TV/radio stations.
website hits Over 5,000 people a week visited www.financial-ombudsman.org.uk
publications distributed

We printed and distributed 1,750,000 copies of
our publications (including 12 editions of our regular newsletter, ombudsman news, and
1.5 million copies of our leaflet, your complaint
and the ombudsman
).

useful links