number and outcome of complaints – by individual businesses
notes for financial businesses on the practicalities involved in our publishing "business-specific" complaints data (relating to individual named businesses)
The Financial Ombudsman Service’s policy on publishing business-specific complaints data, including the background and the reasons, was set out in our policy statement, publication of complaint data: what we will do.
As explained in that policy statement, we publish complaints data about individual named businesses every six months, covering January to June and July to December. The first set of data (for January to June 2009) was published in September 2009.
For each financial business covered, we publish:
- the number of new cases received; and
- the percentage-change in outcome in favour of the consumer in resolved cases closed.
financial businesses
The data we published is listed against the relevant legal entity (FSA-regulated firm and/or OFT-licensed credit business) – listed alphabetically – rather than against trading names (brands) or against any larger group of which the legal entity forms part. But additionally:
- We provide a list of the trading names used at the end of each period by each of the legal entities covered. The list of trading names comes from the FSA. Firms are required under the FSA's Handbook – see SUP 15.5.1(2) – to give the FSA reasonable advance notice of trading-name changes.
- We note against each legal entity the name of any larger group which it formed part of at the end of the period covered. The list of groups comes from the FSA. The columns of data are sortable. So a user can sort the data by group, bringing all the relevant legal entities together.
To ensure that the data – particularly the percentage-change data – is statistically meaningful, we exclude from the published data any legal entity that did not have at least 30 new cases and 30 closed cases during the period (even if it formed part of a larger group). The published data covers around 150 legal entities.
new cases received: number
The number of new cases is, in effect, the number of new chargeable cases during the period. Our computer system counts them as part of the case-conversion process, when a complaint enquiry becomes a (chargeable) case.
At the same time, our computer system generates a "case-conversion" letter to the legal entity concerned – so financial businesses can keep a tally of the number of new cases by totalling the case-conversion letters, using the date of the letter rather than the date of receipt.
The case-conversion letter is the one that: tells the financial business the complaint has become a chargeable case; asks for the relevant papers; and requires the financial business to point out (within 21 days) if the letter should have been addressed to another business.
If a financial business thinks the new case should be recorded against another legal entity, the financial business should say so when it receives the case-conversion letter – not later. And financial businesses in a larger group should always use the right letterhead when responding to consumers.
resolved cases closed: percentage change in favour of consumer
This data is based on cases where there has been a decision, or a settlement, on the merits. So it excludes cases that were out-of-jurisdiction and abandoned. Our case-closure letter says if we have recorded the case as "change" or "no change".
The case-closure letter is generated as part of our case-closure process, after the ultimate decision has been issued. The data is based on resolved cases closed during the relevant period. In the vast majority of cases, the case-closure letter will have the same date as the date the case was closed.
In cases closed after an ombudsman final decision (around 10% of cases) the date of closure is the date of the final decision. From 1 August 2009, in these cases, we have quoted the date of closure in the case-closure letter.
Financial businesses can keep a tally of the percentage by totalling the "change" and "no change" case-closure letters. The published percentage will be equivalent to "change" letters as a percentage of the total of "change" and "no change" letters.
In deciding whether the outcome is "change" or "no change", we compare the final outcome for the consumer when the resolved case was closed against the outcome for the consumer according to the last response from the financial business before the case-conversion letter.
If the final outcome for the consumer was better (whether by a large or small amount), we treat that as "change" – including where the financial business made an improved offer or agreed an improved settlement after the case-conversion letter. Businesses should not wait to see if a consumer refers a complaint to the ombudsman service before making a proper offer.
Where a financial business offered so-called "RU89" redress in a mortgage-endowment case (before case-conversion), and the final outcome is "RU89" redress, we treat that as "no change" – even if the "RU89" calculation would produce a higher figure at the later date.
If (after checking how we classify "change") a financial business disagrees with the outcome that the case-closure letter says we have recorded in a particular case, the financial businesses should write back to the adjudicator straight away – not later. If the financial business and the adjudicator are unable to agree, the issue will be escalated and a manager will check the outcome recorded.
breakdown of data
As well as providing totals, we provide a breakdown according to the five product groups that the FSA also uses for complaints reporting – only we do not break down the percentage change for any product group where a particular business has fewer than (the statistically meaningful) 30 closed cases.
The five product groups are:
- banking
- home finance (including mortgages)
- general insurance and pure protection
- decumulation, life and pensions
- investments
We have agreed with the FSA how the (more numerous) product codes we use map to the five FSA product groups [chart opens in PDF format].
putting the complaints data into context
In late 2008 we brought together a group of representatives from industry trade bodies, consumer groups and the FSA – to begin a process to see whether they could agree how market-share could be measured and published as a way of providing a wider context to the complaints data we publish.
This group of trade and consumer stakeholders subsequently acknowledged that it is not practicable for the ombudsman service to contextualise complaints data against market share in a fair and meaningful way – either across sectors or even within sectors [note from the group opens in PDF format]. This does not, of course, prevent trade associations or individual financial businesses providing contextual information themselves.
implementation
KPMG – our internal auditors – checked our systems for recording the data, and they check the data before publication. As mentioned above, financial businesses can keep a tally of their own data from our case-conversion and case-closure letters.
We give the businesses concerned advance warning of the data we will be publishing about them – on the understanding that they keep this information confidential until publication. We do not provide background data or lists of case-reference numbers. This would not be practicable, given the large number of cases involved.
We publish the data on our website through a link from our existing complaints-data web page – so that it can be seen in the wider context of the types of complaints we receive.
There are separate tables for new cases received and resolved cases closed, showing (in sortable columns):
- the name of the financial business (legal entity)
- the name of any larger group to which it belongs
- the total for the financial business
- a breakdown according to the five FSA product groups
On new cases received, the explanatory notes point out that larger businesses are likely to have more cases than smaller businesses. But the industry/consumer working group set up to explore the issue was unable to come up with a workable way of comparing the data directly to market share.
On resolved cases closed, the explanatory notes point out:
- There is a time lag between receiving a new case and resolving it. So the cases resolved during the period are not all the same as the new cases received during the period.
- The time lag varies from case to case. So the figures for the outcome of cases in a single period may not, on their own, be significant – but the trend over several periods could be.
- Cases that have taken a longer time to resolve may not necessarily represent the most recent performance of a financial business’s in-house complaints handling.
Some cases may relate to things done by a predecessor financial business, taken over by the financial business against which the case was brought.
We also publish – for comparison purposes – the average percentage change for all resolved cases closed in the relevant period (for all businesses, including those below the 30-cases threshold) in total and also broken down according to the five FSA product groups.