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annual review 2014/2015

1 April 2014 to 31 March 2015

the complaints we resolved

We were set up to resolve complaints informally - as an alternative to going to court. In the chapter the complaints we received, we describe how we try to sort out problems and concerns at the earliest possible stage - so we don’t need to become involved “officially”.

However, nearly one in five of the enquiries we received this year was referred to us more formally - generally either because there wasn’t an immediate solution, or because the two sides were already entrenched. This section looks at how we dealt with and resolved these complaints.

total number of cases we resolved

year ended
31 March
cases resolved
2015 448,387
2014 518,778
2013 223,229
2012 222,333
2011 164,899
2010 166,321
2009 113,949
2008 99,699
2007 111,673
2006 119,432

This year we resolved a total of 448,387 complaints - compared with 518,778 last year. This is a lower number than in the previous year - reflecting the significant decline in the number of new PPI cases. It also reflects the increasing complexity of PPI and other complaints.

how we resolved the cases

The majority of complaints that people bring to us each year are resolved informally by our adjudicators. Our adjudicators listen to how both sides see the situation - look at the facts and information to get to the bottom of what’s happened - and then suggest a way forward that’s fair in the individual circumstances.

But where the dispute is harder-fought or entrenched, either the business or the consumer may ask for an ombudsman’s final decision. This is the most formal, last stage of our process - and it’s legally binding on both sides if the consumer accepts it.

Once the ombudsman has given their decision, our involvement in the complaint ends. But if the consumer doesn’t agree with the decision, they’re not bound by it.

complaints settled by our adjudicators

year ended
31 March
cases settled
2015 405,202
2014 487,749
2013 198,897
2012 201,793
2011 147,434
2010 155,591
2009 105,275
2008 91,739

cases appealed to an ombudsman for a final decision

year ended
31 March
cases appealed
2015 43,185
2014 31,029
2013 24,332
2012 20,540
2011 17,465
2010 10,730
2009 8,674
2008 7,960

In last year’s annual review, we said that PPI cases were becoming increasingly complex and entrenched - compared with when complaints about mis-sold PPI first reached us in large numbers a few years ago. This is reflected in the significant increase this year in the number of PPI complaints that were decided by an ombudsman. This year the number of cases decided at this stage increased by more than a third.

In total 10% of the complaints we resolved this year were decided by an ombudsman. Of the final decisions made by ombudsmen during the year, 34% of requests were made by financial businesses and 66% by consumers.

requests for an ombudsman decision by financial businesses 34
requests for an ombudsman decision by consumers 66

Because of the way ombudsmen share knowledge with adjudicators - and because our approach is well-established in most areas - it’s unusual for an ombudsman to reach different conclusions to the adjudicator who initially looked at a complaint.

In 92% of final decisions this year, the ombudsman didn’t recommend anything different to the adjudicator. Where they did, it was usually because new facts or evidence came to light only after the adjudicator had given their answer.

ombudsman decisions by area of complaint %
investments 27
pensions 26
mortgages 22
general insurance (excluding PPI) 19
consumer credit 18
banking 14
% of cases that required an ombudsman decision %
PPI 49
general insurance (excluding PPI) 16
banking 15
investments 7
mortgages 6
consumer credit 4
pensions 3

As in previous years, the proportion of cases that were appealed to an ombudsman varied between different financial products and services.

For example, we found that complaints involving pensions and investments were far more likely to require an ombudsman’s decision. These complaints often involve very large sums of money - and people’s financial security can depend on the outcome. So it’s understandable that people may want to pursue these types of complaints as far as they can.

… complaints involving pensions and investments were far more likely to require an ombudsman's decision

We continue to see very few differences between the proportion of men and women who ask for a final decision - or between different faith and ethnic groups. There’s more information about people’s different attitudes to complaining in the section who complained to us.

Since April 2013 we’ve been required, under the Financial Services Act 2012, to publish all of our ombudsmen’s final decisions (apart from in cases where it would be inappropriate to do so).

Two years on, we’ve now published more than 60,000 decisions on our website. Our online “decisions database” can be searched by product type, outcome and key words. Businesses are required by the regulator’s rules to keep up to date with relevant decisions - to ensure that they understand our approach and, wherever possible, are settling complaints fairly without our involvement.

the backgrounds of the ombudsmen

legal 37
regulatory and government 22
financial services 21
other 20

Our ombudsmen represent a broad cross-section of UK professional life. Before joining us, they worked in areas ranging from law, diplomacy and teaching, to financial services, local government and other ombudsman schemes and regulators. We publish all our ombudsmen’s backgrounds and career histories on our website.

district judges | local government | mortgage broking | teaching | trading standards | human resources | charity and third sector | consumer advice | solicitors and barristers | personal banking

Our ombudsmen are appointed by our board - careful consideration is given to -whether candidates have the right experience and qualifications to make decisions that can affect lives and livelihoods.


In every case, we give each side an equal chance to tell their side of the story - and to hear what the other side thinks. So we receive only very few requests for “hearings” - face-to-face meetings that our rules say we can hold in certain circumstances.

We know some people feel strongly that they would like to give evidence in person. But we’re not a court. So where we do receive a request for a hearing, we agree only if the ombudsman believes that they can’t decide the case fairly with the evidence we’ve received over the phone and in writing.

Because we work openly with both sides as a matter of course - and we don’t think hearings should be held just so people can “confront” each other - it’s very rare for an ombudsman to decide that a hearing is necessary.

recording the outcome of complaints

We record the outcome of a consumer’s complaint as “upheld”in cases where:

  • When a complaint is referred to us, we often find that people have a very fixed idea of how it should be settled. It’s our role to reach an answer that’s fair for both sides - which can be quite different to either side’s original position.
    We record a complaint as “upheld” if:
  • We decide that the consumer has been treated unfairly by the financial business - and we tell the business to do something to put matters right.


  • The financial business made the consumer an offer in their final response - but after looking into what’s happened, we decide the business should change or increase their offer to put things right fairly.

We record the outcome of a complaint as “not upheld” in cases where:

  • We decide the business hasn’t done anything wrong - and we explain to the consumer why we think this.


  • The financial business has done something wrong - but before the complaint was referred to us, they made a fair offer to put things right.

% of complaints we upheld

insurance complaints

insurance complaints 2012 2013 2014 2015
payment protection insurance (PPI) 82% 65% 65% 62%
motor insurance 49% 47% 38% 35%
buildings insurance 50% 48% 44% 37%
contents insurance 52% 40% 39% 34%
travel insurance 52% 48% 53% 46%
health insurance 40% 29% 31% 32%

banking and credit complaints

banking and credit complaints 2012 2013 2014 2015
current accounts 31% 34% 40% 36%
credit cards 54% 33% 30% 32%
mortgages 28% 26% 30% 33%
unsecured loans 37% 34% 35% 38%
consumer credit 51% 50% 48% 47%
savings accounts 44% 42% 41% 40%
other banking services 41% 42% 39% 45%

investment and pension complaints

investment complaints 2012 2013 2014 2015
mortgage endowments 28% 25% 28% 25%
whole-of-life policies and savings endowments 30% 23% 21% 22%
investment bonds 51% 36% 37% 33%
pensions 38% 34% 34% 31%
stockbroking and portfolio management 57% 49% 51% 45%

year ended 31 March

On average, we found in the consumer’s favour in 55% of the complaints we resolved during the year - slightly lower than last year.

Looking at complaints involving products other than PPI, our overall uphold rate was 36%. But our uphold rates for different individual financial products and services varied significantly. For example, during the year we upheld 21% of complaints about term assurance - but 85% of complaints about card protection insurance.

complaints data about named businesses

Every six months we publish information on our website about the individual businesses involved in the complaints we're dealing with. For businesses that have had 30 or more new cases and 30 or more resolved cases over that six months, we show both the proportion of complaints we upheld and the number of new complaints.

The complaints data shows that:

  • Around 200 businesses, out of over 70,000 that we cover, together account for 94% of our workload.
  • The number of complaints relating to each individual business ranges from 31 to around 55,000.
  • The proportion of cases we uphold in the consumer’s favour varies substantially from business to business - between 2% and 96%.

putting things right

In the cases we “uphold”, our general approach is to put the consumer in the position they’d be in if the business hadn’t treated them unfairly or made a mistake. What this means in practice depends very much on the consumer’s individual circumstances - and the impact the particular problem has had.

There are a number of ways we can use our power to put things right fairly. For example, we can tell the business to pay redress - where the consumer has lost out financially because of a mistake the business made.

We can also tell a business to take action to put things right - for example, arranging for their customer’s credit file to be corrected, or dealing with an insurance claim that was originally rejected.

In some cases, we also tell the business to pay compensation to reflect the wider, non-financial impact of the problem - such as upset and unnecessary inconvenience. We told businesses to pay this kind of compensation in 11% of the complaints we upheld this year.

We give examples on our website of the level of compensation we might tell a business to pay in different situations. We encourage businesses to consider carefully their customer’s individual situation when deciding what’s fair.

There isn’t an exhaustive “tick-box” list of ways that problems can be put right. It’s important to find an answer that feels fair in the circumstances - and allows both sides to move on.

the redress ombudsmen told businesses to pay

year ended 31 March %
telling the business to take actions to put things right that don't have a direct cash value (for example, correcting a credit reference) 20.5
redress up to £1,000 14
£1,001 to £25,000 13
£25,001 to £75,000 1.5
£75,001 to £150,000 0.5
more than £150,000 0.5
telling the business the basis or formula on which they should pay compensation - for example, where specialist calculations need to be made 50

We can tell a business to pay compensation of up to £150,000 - and recommend that they pay more than this.

The amounts in the chart don’t include compensation we told businesses to pay for the non-financial impact the complaint had on the consumer.

… a clear, positive conversation could have got to the root of the problem

Having a problem - and needing to make a complaint - can be frustrating and upsetting. And people generally aren’t financial experts. So it isn’t surprising that consumers sometimes articulate what’s gone wrong in an unfocused way that doesn’t seem reasonable to the business. However, we see cases where the business has simply dismissed or ignored their customer’s concerns - where a clear, positive conversation could have got to the root of the problem and prevented a complaint from escalating.

Just because we don’t uphold a complaint on its merits doesn’t mean the consumer doesn’t feel upset or let down by what’s happened. And the fact someone hasn’t presented a reasoned “case” - or the business doesn’t feel that the argument is reasonable - doesn’t automatically mean that the complaint has no merit, or that we should dismiss it as “frivolous and vexatious” under our rules.

So it’s only in very few cases that we decide that it would be unfair to charge the business a case fee because the complaint is “frivolous and vexatious”. This year we categorised 6% of cases as “frivolous and vexatious” - some of which were brought to us by claims managers.

We understand that some businesses feel that claims managers in particular bring “frivolous and vexatious” complaints to us. As we explain elsewhere in this annual review, we continue to work with claims managers and their regulator to ensure that they understand our approach - and don’t refer complaints to us that they know we’re very unlikely to uphold.

how quickly we resolved complaints

year ended 31 March resolved within 3 months resolved within 6 months resolved within 9 months resolved within 12 months
excluding PPI complaints
53% 78% 86% 90%
all cases
23 39 48 57
excluding PPI complaints
44% 71% 84% 90%
all cases
25% 48% 67% 78%
excluding PPI complaints
43% 73% 84% 89%
all cases
30% 58% 72% 81%
PPI cases waiting to be resolved at 31 March 2015 %
waiting less than six months 30
between six months and a year 23
between a year and two years 36
over two years 11
% of cases resolved within three months - by product area %
current accounts 69
credit-broking 67
credit cards 63
payday loans 61
motor insurance 61
consumer credit 54
mortgages 51
investments and pensions 44
PPI 12

The time it takes us to resolve complaints varies across different product areas. For example, around seven in ten complaints involving current accounts and credit broking were resolved within three months. In contrast, because of the complex, hard-fought nature of the PPI complaints we’re increasingly dealing with, only 12% of these complaints are resolved within three months.

This year our payday loan team resolved 60% of complaints within 21 days. By having upfront, constructive conversations over the phone - or, in one in five cases, using webchat - we were able to resolve many problems at a very early stage.

As we explain in the earlier se tion the complaints we received, it’s understandable that a lengthy complaint process can be frustrating - at a time when some financial products, like payday loans or insurance, can be taken out in a matter of minutes.

Many businesses have been pleased to have the opportunity to work with us in more flexible ways - aimed at helping their customers more efficiently. This included sending us files or information within shorter timeframes - and being ready to sort out problems over the phone, rather than by exchanging letters or emails.

To continue to speed up the process of bringing a complaint to us, we rely on the ongoing cooperation of both sides. In particular, recognising how frustrating waiting can be, we need to keep our customers up to date throughout the time a complaint is with us.

In the section what the complaints were about­, we explain howwe keep in touch with people with PPI complaints. Because of the very large numbers of PPI complaints we’ve received - and the fact that the complaints we’re investigating are increasingly complex and entrenched - these are generally the people who wait the longest for our answer.

our skills and expertise

The problems we see arise from everyday life - and they involve a huge variety of financial products and personal circumstances. So to resolve concerns and complaints fairly, it’s essential that the people who work for us have a wide range of skills, expertise and experience.

As we explain elsewhere in this annual review, we find that complaints are often referred to us because communication between the business and their customer has broken down. Recognising this, we place equal importance both on our people’s ability to understand and bring together different perspectives - and on their specific knowledge of the financial matters we cover.

To ensure we’re giving fair answers - at the earliest possible stage - this year we:

  • Continued to improve the way our people share their knowledge with each other - expanding the number and size of our “knowledge communities” and developing our online knowledge-sharing tools. This helps us to ensure that our case handlers can quickly find the information they need - and are applying it fairly and consistently.
  • Increased the number of ombudsmen by a third from 234 to 306 - and provided them with ongoing training and support.
  • Continued to ensure that our adjudicators are supported, developed and mentored by experienced colleagues - working together in a network of professional communities that we call “pods”.
  • Supported over 600 requests for educational sponsorship - to help our people develop their skills and gain new relevant qualifications.
  • Made sure that managers and senior managers are supported and developed to get the best out of their teams - by providing ongoing training and opportunities to share and learn from experiences.

taking pride in our work

We need to ensure we’re meeting our customers’ high expectations of our service. Fundamentally, in each case we’re asked to resolve, we want the consumer and the business to feel that we’ve:

  • Listened to them and cared about what they said.
  • Got to grips with things and used common sense.
  • Given clear and honest answers and let them know where they stood.

To ensure we maintain the confidence of our customers and stakeholders, this year we:

  • Introduced a way of getting instant feedback from our customers - by asking them to complete a short phone survey immediately after speaking to us.
  • Where someone indicates they’re unhappy, we can phone them back, talk things though and sort things out straightaway.
  • Continued to encourage a culture where everyone can talk openly and share ideas about improving customer service. This includes having senior managers and board members review a random selection of cases - so they can ask questions and challenge where they feel our service could have been better.
  • Monitored how proud our people said they were of their work on each individual case.

listening to our customers

Each year we carry out extensive research among our customers and stakeholders. The views and experiences people share with us help us to get an in-depth understanding of how they feel about the ombudsman - and about raising and resolving concerns and complaints more generally. This in turn helps us to review our ways of working - to make sure we’re providing the best possible service.

Our research this year involved:

  • Running monthly online surveys and six-monthly postal surveys to find out how people who brought complaints to us rate different aspects of our service.
  • Asking businesses for their views on our service through online and postal surveys.
  • Asking MPs about their experience of helping constituents to use our service.
  • Monitoring general public awareness of the ombudsman service - as part of our work to make sure that we’re helping everyone who needs us.
  • Asking people using our website to tell us whether they found the information useful - and how easy they found it to use our new digital services.
  • Holding focus groups to find out what people expect from our service.
  • Commissioning research to understand why some people choose not to bring their complaints to us - or not to complain at all - and how we could help them.
  • Running quick online polls on our website to find out how people judge fairness in everyday situations.

In the sections who complained to us and who the complaints were about, we give more detail about what we learned from our research this year. And there’s more information about how we listen to our customers’ views face to face in our insight and outreach.

handling complaints about our own service

We understand that people might be disappointed if our answer isn’t what they’d hoped for. We want businesses and consumers to feel we’ve treated them well - whatever the outcome of the complaint. So we always thoroughly look into any concerns that people raise with us about the level of service we’ve provided.

Making a complaint about our customer service isn’t the same as asking us to review our answer about the particular merits of a financial complaint. In some cases, simply clarifying this difference - and explaining the next steps for taking things further - is enough to sort out someone’s concerns.

Even where someone is unhappy about our customer service, we find that manyproblems can be sorted out very early on - generally just by their talking things through over the phone with the relevant manager here. If this isn’t enough to resolve the problem, one of our senior managers will investigate what’s happened.
During the year we responded to 2,757 complaints about our service - 3% fewer than last year. We were able to resolve 60% of these complaints straight away within the same team where the problem arose. In 39% of complaints, a senior manager was able to put things right.

Although our complaints process is available for everyone who uses us, we generally receive far fewer complaints from businesses than from consumers or their representatives. This year, around 3% of complaints about our service were from businesses, compared with 2% last year.

Like last year, in 37% of complaints about our service, we agreed that the level of service we had provided wasn’t good enough - for example, because our customers had been inconvenienced by avoidable delays or administrative mistakes on our part.

Just as we suggest that businesses compensate their customers when something has gone wrong, we want to recognise the impact of our own mistakes. Where we offered people compensation this year, the average payment was around £180.

If someone isn’t happy with the response from one of our senior managers - which happens in about 1% of complaints - the matter can be referred to the independent assessor. The independent assessor - who is appointed by our non-executive board - will carry out a formal review of the level of customer service we’ve provided.

If the independent assessor thinks that we haven’t provided an acceptable level of customer service, she can recommend we take action to make sure the same thing doesn’t happen again. The independent assessor reports to our board each year on the findings and recommendations she has made. We publish this report in full on our website.

improving the way we work

We also need to continually review how we work to maintain and improve our quality, consistency and efficiency. During the year - building on last year’s projects and initiatives - we continued to develop our ways of working. This included:

  • Redesigning our website - beginning with the most frequently-used areas - to make it easier for visitors to find the right level of information they need to answer their question.
  • Launching our new webchat service - allowing customers to engage with us online. This followed on from trials last year, where many people told us that they appreciated this quick and discreet way of getting an answer from us.
  • Continuing to strengthen our “horizon-scanning” work, meaning we can quickly identify and respond to changes in the number and type of complaints and concerns reaching us.
  • Launching our new online complaint service. Although people have been able to download and email us back their complaint form for many years, they now have the option to tell us about their complaint and upload any relevant documents completely through our online digital platform.
  • Continuing to improve our digital case-handling capability - to help us manage the vast amount of information we handle.

our budget and funding

We’re funded through a combination of annual levies on the financial businesses we cover - and fees for the individual complaints referred to us each year.
In 2014/2015 the overall fees charged to the financial services sector were 26% lower than the previous year. We froze the levy paid by financial businesses - as well as freezing the case fee for each individual complaint at £550. We also extended our group-account arrangement from the original four to the eight financial groups that make up the majority of our workload. This helps us manage our income in a more predictable and stable way.

Over the year we again charged a case fee only for the 26th and each subsequent complaint. This arrangement recognises that customers of smaller businesses contact us only rarely - and meant that, over the year, nine in ten of the businesses that had complaints referred to us paid no case fees at all. In the section who the complaints were about there’s more information about the businesses whose customers contacted us.

We need to be ready to deal with whatever number and nature of complaints that are referred to us. So we review our funding arrangements at the beginning of each year - based on the types of problems we and our stakeholders expect to see in the year ahead.

Following public consultation in January and February 2014, the board of the FCA and our own board approved a budget for our service that assumed income of £319.2 million and expenditure of £277.4 million - with a forecast unit cost of £629. Our unit cost is calculated by dividing our total costs (before financing charges and any bad debt charge) by the number of cases we’ve resolved during the year.

our unit cost

year ended
31 March
our unit cost (£)
2015 £536
2014 430
2013 720
2012 484
2011 639
2010 555
2009 508

summary of our income and expenditure

our income and expenditure (summary) actual
year ended 31 March 2014
£ m
year ended
31 March
£ m
year ended
31 March
£ m
case fees 62.2 63.3 82.9
supplementary case fees 0.0 0.0 29.7
group fees 163.9 163.4 205.1
compulsory jurisdiction levy 23.5 23.3 23.4
consumer credit jurisdiction and voluntary jurisdiction and other income 2.2 1.8 2.9
total operating income 251.8 251.8 344.0
net movement in accrued and deferred income 74.5 67.4 (10.5)
total income 326.3 319.2 333.5
staff and staff-related costs 193.1 219.9 181.5
professional fees 7.0 11.7 6.6
IT costs 6.6 7.4 7.3
premises and facilities 23.7 26.0 17.5
other costs 1.6 1.9 1.6
depreciation 7.7 9.7 6.4
bad debts 0.2 0.8 0.0
total expenditure 239.9 277.4 220.9
operating surplus/(deficit) 11.9 (25.6) 123.1
accounting surplus before tax 86.4 41.8 112.6

The figures above are drawn from our unaudited management accounts - and may be subject to change. The directors’ report and audited financial statements will be available separately on our website once approved.

annual review 2014

annual review 2014/2015

And if you can't quite make it through all 176 pages - you can see all the highlights in this handy 3 minute video.