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plan & budget 2004/05 for the year ending 31 March 2005 - complaint trends

4.1 As we are acutely aware, predicting the numbers of new complaints is not an exact science. It can be affected by many different factors, including the firm’s attitude to a certain type of complaint, the state of the economy and the stock market, and media coverage. Given the unexpected increase in complaints this year, we will particularly value feedback on our workload assumptions.

4.2 We have tried in the past to validate our assumptions about the likely numbers of future complaints by talking to the FSA, industry bodies, consumer groups and firms. These discussions are a valuable source of information for us, and we have decided to formalise this information-gathering by recruiting a new member of staff, whose role will be to analyse external and internal data, with the aim of increasing the accuracy of our forecasting.

The external issues that we expect to have an impact on the level of complaints during the next 18 months include:

4.2.1 mortgage endowments We expect to continue to receive complaints at a similar level as at present until the second half of 2004/05, when we expect a slow reduction. This likely reduction in the number of complaints will be driven by a number of factors including:

  • new rules waivers given to some firms by the FSA, and a return to normal complaint-handling timescales for other firms;
  • a reducing pool of mortgage endowment policyholders who have not yet complained; and
  • time limits that will begin to bite, rendering potential complaints “out-of-time”.

4.2.2 single premium investment bonds (including “precipice” bonds) The number of complaints has increased significantly in 2003/04, and we expect to receive a significant number in 2004/05 as more of these bonds reach maturity.

4.2.3 insurance and mortgage intermediaries The information given to us by these intermediaries’ trade associations suggests that we will not see a large number of new complaints from these firms, as a proportion of the total number of complaints we receive.

4.2.4 voluntary jurisdiction At present, about 300 firms have joined our voluntary jurisdiction, 250 of which will move into our compulsory jurisdiction in 2004/05. We do not expect these firms to produce a significant number of complaints during the year.

4.3 customer contact division (CCD)

Each week our customer contact division (CCD) - our initial contact point for consumers - handles around 6,000 phone calls and 5,000 pieces of correspondence. In line with our objective of resolving issues at the earliest appropriate stage, we are able to resolve the vast majority of enquiries in CCD and they are never converted to “chargeable cases”. This year, the total number of contacts made to CCD will have increased by 20% compared with 2002/03, largely as a result of the increase in mortgage endowment complaints. We expect a modest reduction in 2004/05, as mortgage endowment-related queries start to decline.

4.4 In the main, we have managed the increased workload in CCD through further improvements in efficiency, although we have also recruited more staff. The restructuring of CCD, together with continued staff training and development, and the increasing reliability of our resource planning processes, has enabled the division to make significant improvements in the standards of service, as well as coping with the additional work. Over 85% of calls are now answered within 20 seconds, with just 1% of calls being abandoned. Twelve months ago, 57% of calls were answered within 20 seconds and 8% of calls were abandoned. Similar improvements have been made in the processing of correspondence.

Consumers have recognised these improvements - 94% of those who responded to our satisfaction surveys said that they found it easy to contact us and 91% said they were happy with the way that CCD dealt with their enquiry.

4.5 Phone and written contacts have increased by 20% over 2002/03, but we expect the level of contacts to fall in 2004/05, in line with our assumptions about levels of new complaints.

actual 2002/03
forecast 2003/04
budget 2004/05
calls to our enquiry line (0845 080 1800)
265,554
298,000
283,000
new written enquiries
196,786
257,000
231,000
total
462,340
555,000
514,000

4.6 analysis of new complaints

Because of the difficulties in forecasting complaint volumes, we are assuming that the underlying volumes will remain constant for 2004/05 and 2005/06, except for a fall in complaints about mortgage endowments. We have assumed an increase of 5,000 complaints in 2005/06, following the extension of our jurisdiction to insurance and mortgage intermediaries. In our assumptions, we have also allowed for an additional 4,000 complaints to cover product areas that have not so far generated any significant number of complaints to us.

type of complaint
actual 2002/03
forecast 2003/04
budget 2004/05
plan 2005/06
endowment policies linked to mortgages
13,570
50,000
35,000
15,000
single premium investment bonds
2,631
6,000
4,000
2,000
pension products
7,233
5,000
5,000
5,000
mortgage loans
2,903
3,000
3,000
3,500
split capital investment trusts
2,233
3,000
2,000
0
non mortgage endowments/ whole-of-life policies
5,009
4,000
4,000
4,500
motor insurance
2,372
2,750
3,000
3,000
current accounts
1,602
1,700
1,800
1,900
buildings/contents insurance
2,294
2,750
3,000
3,000
travel insurance
1,088
1,400
1,400
1,500
dual variable rate mortgages
6,535
500
0
0
mortgage and general insurance intermediaries
0
0
0
5,000
"new" types of complaint
0
0
4,000
4,000
other complaints
14,700
17,900
16,800
19,600
total
62,170
98,000
83,000
68,000