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annual review 2007/08

1 April 2007 to 31 March 2008

the complaints we received

at the front-line

Our customer contact division provides our front-line for consumer enquiries - by phone, letter and email. In the 2007/08 financial year we handled a record 794,648 initial enquiries and complaints from consumers - a 27% increase on the previous year, and the highest number since the Financial Ombudsman Service was set up.

This means that each working day our customer contact division handled over 3,000 phone calls and items of new correspondence - from consumers with questions, concerns and complaints about the way they have been treated by businesses providing financial services.

A significant number of consumers also access the information they need directly from our website, rather than by phoning us or writing to us. An average of 5,300 people visited our website each day during the year - and over 300,000 complaint forms were downloaded from our website (a 36% increase on the previous year).

The other most regularly-used of our online resources were the frequently-asked questions (FAQs) on complaining to the ombudsman, and our new range of consumer factsheets.

initial enquiries and complaints from consumers

year ended 31 March phone enquiries written enquiries total enquiries
2008 425,942 368,706 794,648
2007 341,455 286,359 627,814
2006 359,131 313,842 672,973
2005 328,999 285,149 614,148
2004 291,892 256,446 548,338

Only around one in six of these initial enquiries went on to become "full-blown" cases requiring the involvement of our adjudicators or ombudsmen. Our customer contact division aims to resolve as many of these initial problems and complaints as possible at this early stage. This usually involves sorting things out for consumers over the phone there and then.

We know from experience that most people prefer this quick and simple way of resolving problems.

how we handle initial enquiries and complaints

The list below shows the different ways in which our front-line customer contact division can help settle initial enquiries or complaints at the earliest stage - before they become "full-blown" cases.

Has the consumer complained to the business involved yet?

If not - refer the complaint to the business, giving it the chance to sort out the problem.

Is it a complaint - or just a request for information?

Provide the consumer with the facts they need, to resolve the problem themselves.

Does the consumer need advice on financial, debt or legal matters?

Direct the consumer to relevant helplines and websites.

Should the business involved be given a last chance to settle the complaint?

Persuade both sides to resolve the matter themselves - without escalating the case as a formal dispute to the ombudsman service.

Can we resolve the problem straight away?

Step in promptly, talk to both sides, and see if a few practical suggestions can help sort things out.

Is the complaint clearly outside our remit?

Explain the rules of our jurisdiction - for example, on time limits that apply.

Is the complaint clearly without merit?

Explain why we don't believe it would be helpful or productive to pursue the matter further.

Does the consumer want to pursue the complaint formally?

Give an early steer on the likely outcome - from our informed independent viewpoint.

Is the consumer complaining to the wrong organisation?

Suggest other relevant bodies or ombudsmen.

Is it a matter for the regulator?

Explain the difference between redress and regulatory issues - referring to the relevant regulatory organisation.

Being accessible is something we take very seriously. We are here for people from all backgrounds and sections of the community - not just those who are the most confident and articulate when it comes to complaining. No one needing to access our service should feel disadvantaged by language barriers or other difficulties.

We use an instant phone-based interpreting service to handle phone calls in languages other than English, and our website has information about the ombudsman service in over 20 languages (including video and audio clips in mpeg and mp3-format). We offer TypeTalk and sign language on request, and we regularly provide information in formats such as large print, audiotape/CD and "accessible text" (sometimes called "EasyRead"), to suit individual customers' needs.

Many consumers are unsure how to go about complaining - or don't know who to complain to formally at the business they are unhappy with. Where consumers get in touch with us first, before the business involved has had the opportunity to sort matters out, our customer contact division forwards the complaint direct to the business - and asks it to investigate under its formal complaints procedure. We remind consumers that they can ask us to get involved directly if the business is not then able to resolve their complaint within eight weeks.

Where consumers have already complained to the business in question - and contact us to say they remain dissatisfied with the business's response - our customer contact division sorts out the paperwork and details we need, to be able to look at the case. We can often get much of the relevant information by guiding the consumer through our complaint form over the phone. This can be the most efficient way for us to get the details we need - and consumers clearly value the reassurance of personal contact by phone.

Our customer contact division also offers front-line advice and general guidance to consumers. This includes explaining the complaints process and discussing individual cases, where consumers are confused about any redress already on offer, or are uncertain how - or whether - to proceed with a complaint.

Where further work is needed to resolve complaints, our customer contact division refers cases to our specialist teams of adjudicators and ombudsmen.

new cases referred to our adjudicators

In the year ended 31 March 2008, our customer contact division referred 123,089 new cases to our adjudicators and ombudsmen for more detailed dispute-resolution work - out of a total 794,648 enquiries and complaints initially received at our consumer front-line.

This is a 30% increase on the 94,392 new cases recorded in last year's annual review - and is the highest number of cases we have received in any year since the ombudsman service was set up.

number of new cases

year ended 31 March number of new cases
2008 123,089
2007 94,392
2006 112,923
2005 110,963
2004 97,901
2003 62,170
2002 43,330
2001 31,347

This record number of new cases resulted mainly from:

  • banking-related complaints more than tripling in number - driven by the heavy volumes of complaints about unauthorised-overdraft charges we received in the first half of the year.
  • insurance-related complaints doubling in number - driven largely by the record levels of complaints about payment protection insurance towards the end of the year.

The heavy volumes of complaints about unauthorised-overdraft charges and payment protection insurance - that pushed up the total number of new complaints in the year - also masked the 70% fall in the number of mortgage endowment disputes. These complaints fell from 46,134 in the year ended 31 March 2007 to 13,778 in the 2007/08 financial year, the lowest number in five years.

We had been anticipating this reduction in mortgage endowment complaints - though not at quite so steep a rate - as increasing numbers of consumers reached their deadline for complaining.

who these new cases are from

complaints made by consumers themselves 73
complaints made on behalf of consumers by claims-management companies 19
complaints made on behalf of consumers by third parties such as Trading Standards and Citizens Advice 6
complaints made by small businesses 2

The majority of people who bring complaints to the ombudsman service do so in their personal capacity as individual consumers. However, we also look at complaints brought by small businesses, charities and trusts that have an annual turnover, income or net asset value of up to £1 million.

Sole traders and people running small businesses may not always register a complaint with us specifically as a business dispute, because they often see the issues as essentially personal rather than commercial. This means that, in practice, the proportion of complaints made by smaller businesses may be slightly higher than the figure shown in the chart above.

People wanting to bring a complaint to the ombudsman service can appoint someone else to do this on their behalf - for example, a member of their family, a friend or Citizens Advice.

In almost one in five cases referred to the ombudsman service, consumers employed a commercial claims-management company to handle their complaint for them.

cases referred by claims-management companies

mortgage endowment complaints 33
credit card complaints 24
payment protection insurance (PPI) complaints 14
current account complaints 13
other types of complaint 16

We tell consumers that we do not think they should need the help of a commercial third-party - such as a claims-management company or solicitor - to bring a complaint to us. We decide cases by looking at the facts - not at how well the arguments are presented. We prefer to hear from consumers in their own words. If people employ someone to present their case for them, this could mean they end up paying them out of any compensation that is due.

In the specific context of personal pension-related complaints involving SERPS, we have seen a significant number of cases this year where some claims-management companies have given consumers unrealistic expectations of large sums of compensation in cash, without appearing first to have properly assessed the actual merits of the individual cases.

image of annual review 2008

This annual review is published in accordance with paragraph 7 of schedule 17 of the Financial Services and Markets Act 2000.