key facts and figures

Our customer contact division also gives general advice and guidance to consumers with enquiries. At this early stage, we try to nip straightforward problems in the bud – before they become full-blown disputes. For example, where a problem stems from a simple administrative error or misunderstanding between the customer and the firm, it might only take us a few phone calls to sort matters out.

An increasing number of consumers are also seeking the information they want directly from our website, rather than having to phone or write to us. More than 60,000 people are now visiting our website each month– and a third of these people are downloading our complaint form directly off the website.

Where further work is needed to resolve complaints, our customer contact division acts as the gateway to our specialist teams of adjudicators.

complaints referred on to our adjudicators

In the year ended 31 March 2003, our customer contact division referred 62,170 new cases to our adjudicators for more detailed dispute-resolution work – a 44% increase on the previous year.

You can find more details and background information about the main types of new cases we received during the year in overview of complaint trends

The chart below shows the number of complaints we have resolved at each stage of our complaints-handling process.

outcome of cases	year ended 31 March 2003		year ended 31 March 2002
	number of cases	% of total	number of cases	% of total
resolved by mediation or conciliation	22,312	40%	17,637	45%
resolved after investigation by an adjudicator	27,857	49%	15,678	40%
	of which 13% mixed outcome (partial win/lose for both sides) 18% in favour of the consumer 69% in favour of the firm		of which 10% mixed outcome (partial win/lose for both sides) 23% in favour of the consumer 67% in favour of the firm
resolved by the final decision of an ombudsman	6,290	11%	5,879	15%
	of which 15% mixed outcome (partial win/lose for both sides) 35% in favour of the consumer 50% in favour of the firm		of which 15% mixed outcome (partial win/lose for both sides) 29% in favour of the consumer 56% in favour of the firm
total cases resolved	56,459		39,194

average number of cases resolved per week by each adjudicator 2000 = 3.1 2001 = 3.3 2002 = 3.75 2003 = 4.9 year ended 31 March
number of cases resolved 2000 = 22,100 2001 = 28,400 2002 = 39,194 2003 = 56,459 year ended 31 March
our unit cost – the benchmark against which we judge our cost-effectiveness in handling complaints – is calculated by dividing our total costs (before financing charges, establishment costs and any bad debt provision) by the number of cases we complete. 2000 = £730 2001 = £753 2002 = £684 2003 = £518 year ended 31 March

our budget and productivity

This is the first year that we have raised our income directly from firms – firms pay a case fee for each complaint we look into, as well as an annual general levy. Until this year we were mainly funded by service charges paid by the former complaints-handling schemes.

Our total income for the year of £36.2 million was £8 million above the budget. This was almost wholly due to the exceptional increase in the number of complaints we resolved during the year. This means that 58% of our funding was raised through case fees and 42% through the levy – whereas our budget had assumed that income from case fees and levy would be equal. The trend towards a greater proportion of our income being raised from case fees, rather than from our general levy, is set to continue next year – and formed part of the assumptions in our budget for 2003/04, on which we consulted in early 2003.

Our total expenditure for the year was £30 million, compared with a budget of £28.2 million. The increase in costs largely resulted from our needing to recruit additional staff during the year, to deal with the larger than forecast volume of complaints. We had 544 employees at the year-end, compared with a budget figure of 447. There was also an increase in direct costs – for example, postage and phone costs – relating to the increase in our workload.

Our unit cost has fallen to £518, compared with a budget figure of £688. This reduction is a result of the substantial increase in the number of complaints we resolved during the year – achieved through significant amounts of over-time worked by our staff.

Similarly, the increase in our productivity – measured by the average number of cases resolved weekly by each adjudicator, and rising to a figure of 4.9 during the year – has been achieved by many additional hours of over-time and by continued improvements in our case-handling procedures.

However, increased productivity at this exceptional level is not sustainable in the long term – and cannot be expected as part of our normal pattern of improvements in our cost-effectiveness.

The surplus for the year of £6.2 million was almost wholly due to the exceptional number of cases resolved in 2002/03. Our plan has always been to keep our reserves below £1 million, and to return any surplus to firms. Accordingly, we have written off against this surplus our establishment costs of £2.9 million, which were due to be collected from firms in 2003/04 and 2004/05. We will also take the projected level of our accumulated surplus into account, when we set our tariff and case fees for 2004/05 (see - financial statements for the year ended 2002/03).

our income and expenditure (summary)	actual year ended 31 March 2003 £ million	budget year ended 31 March 2003 £ million	actual year ended 31 March 2002 £ million	actual year ended 31 March 2001 £ million
income
annual levy	14.7	14.1	0.0	0.0
case fees	21.1	14.1	3.5	0.0
former schemes’ service charges	0.0	0.0	23.8	21.0
other income	0.4	0.0	0.2	0.1
total income	36.2	28.2	27.5	21.1
expenditure
staff-related costs	20.5	19.7	18.6	15.5
other costs	6.6	5.2	6.1	4.4
interest	0.4	0.7	0.7	0.6
depreciation	2.5	2.6	1.8	0.1
total expenditure	30.0	28.2	27.2	20.6
exceptional item - write-off of establishment costs	2.9	0.0	0.0	0.0
surplus	3.3	0.0	0.3	0.5

how old are people who complain to the ombudsman? 35 to 44 =25% 45 to 54 = 25% 55 to 64 = 24% 65 or older = 16% 25 to 34 = 9% younger than 24 = 1%

Our ‘average’ customer is between 35 and 54 years old. Half the people who use our service are in this age bracket, although it represents only a third of the population as a whole. This appears to reflect the fact that people in this age group tend to have wider levels of ownership of financial and investment products. As this is the home-buying generation, a significant proportion of the complaints we receive from people aged between 35 and 54 relate to mortgage endowments.

16% of our customers are above the age of 65 – last year this figure was 10%. People in this age group make up 20% of the population as a whole. As the population ages, and people over 65 come to rely increasingly on private savings and investments in retirement, we may see a continued rise in the number of people in this age group using the ombudsman service.

where do people live who complain to the ombudsman? East Anglia = 4% Northern Ireland = 1% South East = 22% Greater London = 14% South West = 11% North West = 11% Yorkshire/Humberside = 8% West Midlands = 8% Scotland = 7% North East = 5% East Midlands = 5% Wales = 4%

We do not yet have sufficient reliable external data to help us compare the levels of ownership of financial products across the different regions of the UK with the levels of complaints we receive from people living in those regions. But we have compared our own figures that show where people who complain to us come from with the census figures that show where people live in the UK.

This comparison suggests that the geographical location of those using our service broadly reflects the spread of the population across the UK as a whole. Our research shows a variance of more than one or two percentage points in three regions only – the same regions, and exactly the same percentage variances, as last year.

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. 22% of people who used our service came from the South East (home to 14% of the UK population). This reflects the fact that there appear to be proportionately higher levels of ownership of financial and investment products in the South East.

customer diversity

Our customer surveys indicate that around 5.5% of people who use our service define themselves as ‘minority ethnic’. We plan to carry out more research here, to try to find out how this figure compares with the general levels of ownership of financial and investment products among people from minority ethnic communities.

For people who are not comfortable using English, we can provide information and handle phone calls in other languages – and have done so during the year in languages ranging from Albanian to Welsh. During the year we also distributed 5,000 language packs to Members of Parliament – for use when advising constituents – as well as to consumer advice centres across the UK. These packs contain factsheets about the ombudsman service in the UK’s ten most frequently used ethnic languages.

Our research suggests that 12% of our customers have some form of disability – predominantly mobility difficulties, sight or hearing impairment. There is strong demand for our publications in Braille, large print and on audiotape – and we use TypeTalk and sign-language on request. This is part of our commitment to be flexible and accommodate our customers’ needs wherever we can.

Each month we send a customer satisfaction survey to a random selection of around 350 people whose complaints we have dealt with, asking a range of questions about their experience of our service. The feedback we receive from these monthly surveys tells us what our customers want and expect from us – and where we need to focus our priorities in terms of the service we provide. The bar charts above shows how customers who have completed the survey rated our service – measured against a number of customer service benchmarks.

how do people who complain to the ombudsman rate the service we provide?

Each month we send a customer satisfaction survey to a random selection of around 350 people whose complaints we have dealt with, asking a range of questions about their experience of our service. The feedback we receive from these monthly surveys tells us what our customers want and expect from us – and where we need to focus our priorities in terms of the service we provide. The bar charts above show how customers who have completed the survey rated our service – measured against a number of customer service benchmarks.

communication and information-sharing