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ombudsman service publishes annual review of personal finance disputes

1 July 2003

The Financial Ombudsman Service - the organisation that resolves disputes between consumers and financial firms - today publishes its annual review for 2002/03.

The review shows that during the year the ombudsman service has:

  • Received more than 460,000 enquiries and over 62,000 new complaints - an increase of 44% on the previous year.
  • Dealt with a 32% rise in disputes involving investments, a 40% rise in insurance complaints and an 86% rise in banking-related disputes.
  • Resolved 89% of complaints by mediating and recommending settlements - without needing to use formal ombudsman powers to make binding decisions.
  • Reduced costs of handling complaints by 32% - through increased productivity.

Commenting on these figures, chief ombudsman, Walter Merricks, said:

This continuing increase in complaint volumes reflects rising expectations on the part of consumers of financial services - expectations fuelled by firms' promises of better-value products and more customer-focused service. But the rift between expectation and reality can quickly open up if firms fail to deliver on these promises - leading to consumer dissatisfaction and complaints.

The downturn in the financial markets is also a major factor in the rise in complaints. Consumers nursing losses - real or potential - are more likely to feel aggrieved than those who have realised gains. And falling markets have turned into reality the risks that may have been dismissed as fanciful or non-existent at the time the products in question were sold.

Firms' customer service and complaints-handling functions need to be resourced at a level that anticipates such trends and their likely impact on consumers. It is important that consumers should be able and willing to exercise their right to complain. But consumers do, of course, need to consider whether they really were misled or poorly advised by the firm they dealt with - or whether they are simply sharing in the market decline that has affected everyone.

notes for editors

  • The Financial Ombudsman Service was set up by law to help consumers settle unresolved disputes with banks, building societies, insurance companies, investment firms, financial advisers, credit unions and stockbrokers. Complaints covered by the ombudsman service range from travel insurance and pension plans to mortgages and savings accounts.
  • The Financial Ombudsman Service can step in to help resolve disputes where the consumer has already complained to the financial firm and remains dissatisfied. Consumers with an unresolved complaint can get in touch with the Financial Ombudsman Service (phone 0845 080 1800).

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