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ombudsman news

issue 106

November/December 2012

ombudsman focus: so that was 2012

For many people, 2012 will forever be associated with the Queen's Diamond Jubilee and the London Olympics. But what has it meant for the ombudsman? Ombudsman news caught up with Natalie Ceeney to find out.

how would you sum up the year so far, Natalie?

I mentioned in my introduction to this issue that we've never been busier - and that nobody's very surprised to hear it. But what might come as a surprise is exactly how much busier we've been - and the fact that this isn't just down to PPI. The truth is, we've seen more complaints about everything. Between June and September this year, complaints about banking and credit were up some 15% on last year. And cases involving general insurance (that is, not PPI) were up by around 10%.

In a difficult economic climate, with more people than ever feeling the pinch, it's not surprising that complaints have increased - and that people are more prepared to pursue them. We're certainly seeing more cases from people who are struggling financially.

Add to this the fact that people are increasingly feeling more empowered to find out information for themselves - and that trust in financial services providers is generally considered to have slumped - and I think it's inevitable that more people than ever are referring problems to us that they can't sort out themselves with their bank, insurer or financial business.

Obviously it's been disappointing that more complaints haven't been resolved without our having to get involved. But that's the reality. And unfortunately, it looks likely that this will continue into next year.

so what's happening - who's complaining about what, and why?

The work we do can give us - and the financial services industry more widely - some valuable insight into what's happening out there. We've had some new issues coming up this year. The RBS Group's IT problem over the summer was something that no one was expecting. And we're seeing more cases involving interest rate hedging products, financial hardship, payday loans, mobile phone insurance and packaged bank accounts.

We also look for trends in consumer behaviour to help us improve our services. I want to be clear that, despite growing media concern about "fraudulent behaviour" we haven't seen an increase in people bringing complaints to us inappropriately. In our general casework - that is, not PPI complaints, we're finding in favour of the consumer in roughly the same proportion of cases that we always have. But I can't talk about trends without talking about PPI ...

of course - so tell me more about what's happening in PPI

Complaints about mis-sold PPI have dominated our workload this year. We've now received over 500,000 complaints about PPI - and are still getting over 1000 new PPI complaints referred to us each day. This has given us some major challenges.

We've had to find a way to deal with unprecedented numbers of enquiries without compromising on our standards. It's widely known that we've had to pretty much double the number of our case handlers. But if you consider the scale of the problem - with about 35 million PPI policies estimated to have been sold and, so far just under 5 million or so complaints - you won't be surprised to hear that we expect the clean-up operation will take time, and will need a lot of resource allocated to it.

It has to be done properly, and it will take time. We're currently working on our plans for increasing our capacity yet again to deal with the current high volumes of cases. We'll be putting these plans out for public consultation in January, as part of our annual budget discussions.

what does all this mean for financial businesses?

Of the 100,000 or so financial businesses that we cover, in fact 95% never have any contact with us at all. So this means very little for them. Of the businesses that do have complaints referred to us about them, three quarters have fewer than three cases a year. One of our major concerns is to allocate costs fairly and transparently - making sure that they're borne by those businesses involved in the most complaints.

does that mean that smaller businesses won't be affected?

At the moment, we don't charge businesses case fees for the first three cases. And we're just finalising proposals that we'll consult on in January to increase this to 25 free cases from April 2013. This would lift most businesses out of paying any case fees at all - which feels like the right direction to be heading in.

and how about consumers?

In general casework - not PPI - it's inevitable that the higher number of complaints we've received has put pressure on us. But despite the increased volume of cases, we're still resolving most complaints in under six months - and we're working on a number of initiatives to reduce waiting times further. For people who refer PPI cases to us, I'm afraid the wait is likely to be much longer, just because of the scale of the clean-up operation we've got on. But we will always be honest with people about what they can expect - and keep them informed about how their case is progressing.

what were your main achievements this year?

What I'm most pleased about is that we've helped more people than ever - and crucially, that we've retained their confidence in our services. Over three quarters of people who have used us would recommend us to a friend or a member of their family. When trust is such a big issue in our sector, I find this very reassuring. The fact we've managed to do this at the same time that we've had to double the size of our organisation - and test out some innovative work to meet our customers' changing expectations - makes me even more proud.

it was an incredible summer - how did you find it?

It was amazing. People might not realise that we're based only a quarter of a mile away from the Olympic Stadium - so it really felt as though we were in the heart of the action. On a more mundane level, like everyone else based around here, we'd made plans for all kinds of disruption - and we were determined that our customers wouldn't be affected. We thought it all through - from people's journeys to work to rescheduling deliveries of loo roll.

But actually, everything turned out fine. We soaked up the atmosphere and just got on with it. In fact, our productivity rose slightly over the summer. Maybe we were basking in the reflected glory of Team GB.

looking ahead to next year, what would need to happen to start re-building trust between consumers and the financial services industry?

Here at the ombudsman service, we deal with many cases that should already have been sorted out by financial businesses. It's therefore disappointing that we've had to expand so significantly - and our growth is itself an illustration of some of the problems in the industry.

But I do keep returning to the issue of trust. I'm convinced that something can be done about the problems we're seeing. And there are things that businesses can do, and equally, things that consumers can do.

I'd like to see businesses making sure they deliver what they promise to their customers. I'd like to see them learning lessons from the complaints they receive - and offering consumers a fair deal in the first place. And I'd like to see businesses thinking differently about people who complain. These people are not problems - and dealing with their concerns fairly and properly can help improve things for the future.

Consumers can play their part too. I would encourage people to seek out all the information and advice they can - and not to bury their head in the sand if they think they have a problem. Most things can be sorted out by talking openly to their bank or insurer or financial business early on.

As well as resolving individual disputes, our role in this is to share the insight we gather from our work to help prevent problems in the future. And in the meantime, we'll be working as hard as we can to deal with the cases that come our way as effectively as we can.

so far, the Mayan prophecy about the world ending in 2012 hasn't come to pass - will you be on edge as the year draws to a close?

No - I'm too busy gearing up for 2013. I'm pretty confident there'll be one. In fact, I'm so confident that plans for next year are already well underway. In the first few weeks of the New Year we'll be consulting on plans, budgets, trends and workloads for 2013-14. I'm looking forward to hearing people's views on our plans and proposals.