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annual review 2007/08

1 April 2007 to 31 March 2008

who the complaints were about

The following tables show how the new complaints we received during the 2007/08 financial year were spread across the different sectors of the financial services industry.

businesses complained about - by sector %
banks 59
life insurance and investment product-providers 14
general insurers 11
independent financial advisers (IFAs) 4
building societies 4
(including fund managers, stockbrokers and businesses with a consumer-credit licence)
general insurance intermediaries 3
mortgage intermediaries 2

The overall proportion of disputes involving life insurance and investment product-providers more than halved during the year. This reflects the significant decrease in complaints about mortgage endowments sold by larger insurance companies.

The proportion of disputes involving independent financial advisers (IFAs) also fell - by two thirds - similarly reflecting the decrease in mortgage endowment complaints against IFAs.

On the other hand, the proportion of disputes involving banks doubled - as a result of the substantial volumes of complaints about bank charges.

financial products complained about - by sector

mortgage endowments %
life insurance & investment product-providers 49
independent financial advisers (IFAs) 24
banks 20
building societies 4
other 3
personal pension products %
life insurance & investment product-providers 75
independent financial advisers (IFAs) 14
banks 7
other (including building societies and stockbrokers) 4
other investments %
life insurance & investment product-providers 53
banks 23
independent financial advisers (IFAs) 9
stockbrokers and fund managers 7
building societies 2
(including friendly societies and credit unions)
banking and credit products and services %
banks 88
building societies 6
mortgage brokers 3
(including businesses with a consumer-credit licence)
general insurance products %
general insurers 47
banks 28
insurance brokers 13
life insurance & investment product-providers 8
cash-plan health insurers 1
Society of Lloyd's 1
other 2

how often do businesses have complaints about them referred to the ombudsman?

From April 2007 our remit was extended to cover some 80,000 businesses with a standard consumer-credit licence. This means that customers of over 100,000 financial services businesses now have the statutory protection of the Financial Ombudsman Service, should a dispute arise.

These businesses range in size from global banking, insurance and investment giants to sole traders providing credit as a side-line to their main business. This range in size is reflected in the number of disputes we receive about the different businesses we cover.

Six of the UK's largest financial services groups accounted for 52% of complaints we received during the year. At the other end of the scale, 160 cases (0.1% of all complaints) related to friendly societies, and just 11 complaints involved credit unions.

In fact, fewer than 5% of businesses we cover actually had disputes referred to the ombudsman service during the year. 70% of these businesses had just one or two complaints brought to us - which meant they paid no case fees. This was because - as in previous years - we did not charge businesses case fees for the first two complaints in the 2007/08 financial year. For the 2008/09 financial year, we will not be charging businesses case fees for the first three complaints.

  • 1,958 businesses each had 1 complaint referred to the ombudsman service during the year
  • 531 businesses each had 2 complaints to the ombudsman
  • 265 businesses each had 3 complaints to the ombudsman
  • 448 businesses each had between 4 and 10 complaints to the ombudsman
  • 96 businesses each had between 11 and 20 complaints to the ombudsman
  • 119 businesses each had between 21 and 50 complaints to the ombudsman
  • 56 businesses each had between 51 and 100 complaints to the ombudsman
  • 47 businesses each had between 101 and 250 complaints to the ombudsman
  • 28 businesses each had between 251 and 500 complaints to the ombudsman
  • 36 businesses each had more than 500 complaints referred to the ombudsman during the year

how do businesses rate our service?

We carry out quarterly surveys to gauge the views of the businesses we deal with - on how we handle disputes and the extent to which we accommodate their particular needs and concerns. These surveys cover all sectors of the financial services industry, ranging from sole-proprietor businesses to the largest financial groups.

  % who agree % who express no view % who disagree
the financial services industry can have confidence in the ombudsman service 56 26 18
our service is good value for businesses who pay the levy/case fees that fund us 39 38 23
our decisions on cases are fair and unbiased 60 23 17
our decisions are consistent 37 28 35
we provide a good dispute-resolution service for businesses 67 22 11

The proportion of businesses who agreed with these statements increased this year, compared with previous year's survey results. In contrast to previous years, the levels of satisfaction expressed by smaller businesses were higher than those recorded for larger businesses. This may reflect our increased focus - through our smaller firms' taskforce - on identifying and meeting the different needs of smaller businesses.

image of annual review 2007

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