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ombudsman news

issue 108

March/April 2013

ombudsman focus: businesses

your views on our service

Every six months, we ask businesses involved in recently-closed cases for their feedback on the ombudsman experience: what they think we're doing well, where they think we're falling short, and how we can bridge that gap.

We've now collated the results of the most recent survey we ran. Here's our response to some of the comments businesses made about how we could improve our service.

"the number of spurious complaints that are completely unfounded that are sent to the ombudsman is amazing. By making the customer contribute to the cost they may think twice"
- a large business

"you should charge "chancers" for using the service. You are encouraging a compensation culture"
- a small business

The proportion of complaints we decide to be totally without merit is actually minimal. Of more than 120,000 complaints we resolved last year about all financial products other than payment protection insurance (PPI), we dismissed fewer then 1% as "frivolous and vexatious" under our rules. And when we do that, we refund the case fee to the business concerned.

It's true that we dismiss some types of complaints more than others on these grounds. For example, looking at PPI complaints alone, the proportion - though still small - is significantly higher at 7%. And it's situations where we find that no policy was actually sold that often prompt feedback from businesses that we should charge consumers - or at least claims managers - to refer complaints to us.

But looking at the statistics, we're not that convinced "chancers" is a fair description of the majority of the people who refer complaints to us. As our chief ombudsman explained in ombudsman news issue 105, we don't think it's unreasonable that we should investigate complaints where consumers think they might have had PPI but aren't sure.

In fact, in these cases our investigation regularly shows that the consumer has been paying for a policy that they didn't explicitly ask for or know about - and that the business's own investigation has failed to trace.

So as far as charging consumers for our service is concerned, we maintain - and parliament agrees - that their free right of recourse to the ombudsman helps underpin public confidence in financial services.

And though we've thought hard about the option of charging claims management companies to bring complaints to us, we don't believe this would address any of the controversy surrounding that sector - or prevent "mass complaints" at source. And it would be consumers who would ultimately bear the cost.

"you should communicate an expected resolution date once you receive the files requested from a business"
- a small business

We're a demand-led service - so we can only make plans based on the types and volumes of complaints we expect to receive in the year ahead. We ask for the financial services industry's help when we consult on our plan and budget each year - inviting businesses and other organisations to share their forecasts so we can factor these into our own.

But forecasts rarely play out - however compelling the assumptions used to reach them. Based on our estimates, we significantly increased our case-handling capacity over the past year - recruiting an additional thousand staff.

But by the by the end of the calendar year we found we were receiving double the number of complaints than we - and many stakeholders - thought we could reasonably expect when we set our plans back in March 2012.

The impact of these "extra" complaints - the majority of which are about PPI - is that consumers and businesses are sometimes having to wait much longer for us to be able to assess their case. When we ask a business to send us its file, it may still be some time before we're able to look into the complaint. And some businesses aren't so diligent about giving us the information we need when we need it.

So because we can never say for sure how many cases we're going to receive - or how long each is going to take to decide - it's very difficult for us to give businesses (or consumers) an expected timeframe for resolving each one at the point we receive it.

And we've been very open about the fact that, given the unprecedented volumes of PPI complaints still being referred to us, these cases will take significantly longer to deal with than complaints about other products - and for some time to come.

"the time firms and complainants have to wait for ombudsman decisions remains far too long"
- a large business

As well as receiving a record number of complaints, we're finding that, increasingly, they're less straightforward. And perhaps as a consequence of the economic climate, many cases are now harder-fought by both sides.

Both these factors make it less likely we'll be able to mediate a resolution at an early stage - and more likely that one side will ask for an ombudsman's final decision on the matter.

So as well as the number of complaints at this final stage increasing, if a complaint is particularly entrenched - or the outcome is finely balanced - it will take longer for the ombudsman to review what's happened and reach a decision.

That said, over the last year we were still able to resolve around three in ten cases within three months, around six in ten within six months, and more than eight in ten within a year - that's including PPI.

That's broadly the same as in the previous year.

And in terms of making decisions, recruiting 50 new ombudsmen has helped us to significantly reduce waiting times at the final stage of our process. This should continue to improve as we take on more ombudsmen over the coming months.

"you should hold events outside London"
- a small business

We do - you must have missed us! Last year, our outreach team met more than four hundred smaller business representatives at our "introducing the ombudsman" workshops and hundreds of complaint-handlers from larger firms at our workingtogether conferences - everywhere from Glasgow and Manchester to Cardiff and Exeter.

And that's not to mention the dozens of regional forums and other gatherings we attended to meet all kinds of businesses face-to-face. We meet the advice community all over the country too.

We've now planned an expanded programme of events for 2013/14 - from Belfast to Norwich via Crawley and Edinburgh - which there's more information about on our website.

"we'd find a one-to-one session with an ombudsman very useful to understand the rationale of the Financial Ombudsman Service"
- a large business

However useful it might be, it wouldn't be practical for our ombudsmen to visit all the businesses we cover - over 100,000 of them - to explain and discuss how we look at complaints. But we are making changes which we hope will make it easier for businesses to understand and apply our approach.

For example, in response to feedback from a previous survey, we moved from running general complaint-handling workshops to product-specific events. So now businesses can put their questions direct to an ombudsman with a specialism in that area - and discussion can really get down to the finer points of how we decide different types of case.

Last October, we talked motor insurance in London and Manchester, and in January we met travel insurers in London. We're doing the same for health insurance and banking later this year. If you have any questions about our events, email

What's more, in last year's plan and budget we set out our intention to publish all of our ombudsmen's decisions. This will come into effect on this year under the Financial Services Act 2012 - making our rationale in individual cases transparent and accessible to everyone.

And we've now been covered by the Freedom of Information Act for 18 months, as part of which we always look to proactively publish information we're asked for that we haven't already put in the public domain.

Our online technical resource is also regularly updated to reflect the new products and types of complaints we see.

And as always, our technical advice team are available for times where talking a testing situation through would really help. The team can also give an informal steer on the ombudsman's general approach to different types of complaints - as well as information about our rules, jurisdiction and processes. You can phone them on 020 7964 1400 (or email

"the case studies in ombudsman news are so obvious - use real life cases instead"
- a large business

All our case studies are based on complaints we see. We do have to make some changes - often simply to reduce a thick case file into just a few hundred words. Or we might change a small detail to make the complaint less identifiable.

But it's by deciding real cases that we establish and develop our general approach to complaints. So it makes sense that we use real cases to illustrate that approach - especially since people's real stories can be more complex, surprising and powerful than anything we could make up.

fact box

  • For cases involving IFAs and smaller businesses, as many disputes are referred to us by other financial businesses as they are by claims managers.
  • The proportion of cases we upheld in favour of the consumer in 2012 varied from business to business between 3% and 100%.
  • Of disputes appealed to the ombudsman for a final decision, around 4 out of 10 requests are made by financial businesses and 6 out of 10 by consumers.

smaller businesses - meet the ombudsman

We run free sessions across the UK for smaller businesses. The sessions are designed to help businesses with little experience of our service to understand:

  • the complaint handling rules;
  • how the ombudsman service operates;
  • how we decide cases; and
  • the help we offer businesses to support their own complaint handling.

The events are also a great opportunity for business people to meet some of our staff at first hand - including ombudsmen - and for us to hear from businesses about the things that concern them.

over the next few months we'll be visiting:

  • 27 March, Belfast
  • 11-12 April, Manchester
  • 2-3 May, Birmingham
  • 24 May, Milton Keynes
  • 19 June, Durham
  • 20 June, Edinburgh
  • 21 June, Leeds

full list of events and booking details

image: ombudsman news

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.