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ombudsman service publishes annual review of personal finance disputes

22 May 2007

The Financial Ombudsman Service - the independent organisation that settles disputes between consumers and financial companies - today publishes its annual review for 2006/07. The review shows that during the year, the ombudsman:

  • Received 94,392 new complaints in total - including 46,134 new mortgage endowment cases (around 175 every working day, compared with 250 cases a day in the previous year).
  • Saw banking disputes increase by 47% and insurance complaints go up by 10% - with a 21% decrease in cases involving investments.
  • Settled more than half of all disputes about banking, insurance and investments within three months - and two-thirds of mortgage endowment cases within nine months.

While half of the total number of disputes related to ten of the UK's largest financial groups, over 80% of the businesses covered by the ombudsman service had no complaint referred to the service during the year.

Walter Merricks, chief ombudsman, said:

This year marked the completion of over 500,000 financial disputes by the Financial Ombudsman Service since we were set up in 2001. Half of these complaints have involved mortgage endowments - although the record numbers of these cases is now at last decreasing, as we had predicted was likely to happen.

This contrasts with other areas of our work - such as bank charges - where we have seen sharp increases during the year. A year ago we were receiving just ten cases a week about banking charges - by the end of March 2007 this had risen to 500 a week, and we're now handling 1,000 of these cases weekly.

So the continuing challenge for the ombudsman service is clearly to remain sufficiently flexible to respond to sudden changes in complaint trends and numbers that are often caused by external factors outside our control.

Other statistics from the annual review show:

  • Motor insurance disputes up by 25% - with an increase in complaints about the quality of repairs and valuations by insurance companies.
  • Loan protection (PPI) complaints up by 39% - with an increasing proportion of disputes relating to the way the policy was sold.
  • Income protection disputes down by 21%.
  • 111,673 disputes in total settled during the year by the ombudsman service - including 63,877 mortgage endowment disputes.

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image: annual review

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