Financial Ombudsman complaints rise by 2%

Excluding the number of PPI complaints, the figures reveal a 58% increase in the volume of complaints received, with 235,993 new non-PPI complaints compared to 149,315 non-PPI complaints received in 2019/20. The complaints data published today also shows:

• 162,420 non-PPI complaints were resolved by the Ombudsman Service in 2020/21 (compared with 172,216 in 2019/20);
• 40% of non-PPI complaints resolved in 2020/21 were upheld in favour of the consumer (compared with 44% in 2019/20); and
• 42,040 complaints about PPI were received (compared with 122,153 in 2019/20).

The sharp increase in non-PPI complaints has largely been driven by a 66% increase in complaints about banking and credit products, with 170,648 complaints being received in 2020/21, compared with 103,070 in 2019/20. Within the banking and credit category, the data shows:

• Current accounts were the most complained about product, with 23,678 new complaints;
• Unaffordable lending was the most complained about issue, with 57,571 new complaints; and,
• Home credit products had the highest uphold rate, with 83% of resolved complaints being upheld.

The data published today reveals the following trends about insurance and investment and pensions complaints:

• A 36% increase in complaints about insurance, with 44,487 complaints being received in 2020/21 compared with 32,637 in 2019/20;
• A 91% increase in complaints about investments and pensions, with 20,854 complaints being received in 2020/21 compared with 10,920 in 2019/20 and
• 94% of resolved complaints about special event insurance – which covers wedding insurance – were upheld.

Commenting on the figures published Nausicaa Delfas, interim Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said “The Financial Ombudsman Service continues to provide an essential service, helping people with hundreds of thousands of complaints about financial businesses last year. Over the past year, we have seen demand for our service increase significantly, and our teams are working to provide resolutions in cases as quickly as they can.”

“The sharp increase in complaints about issues other than PPI is a reminder that it has rarely been more important for financial businesses to support their customers when things go wrong. As people continue to deal with the impact of Covid-19 on their lives and finances, they know they can come to our service if they’re not happy with how a financial business has treated them.”

Jason Wassell CEO at the CCTA said “From a quick glance, what jumps out is the high upload rates for complaints about home credit and guarantor loans. Uphold rates for both of these are currently over 80%, compared with the average uphold rate of 31% across all products. However, there is more to this when the detail is explored.”

“On home credit complaints, the uphold rate jumped from 39% to 84% in one year, while the number of complaints remained stable. How could there be such a dramatic change in how lenders were dealing with complaints? This shows there must have been a change in approach from the FOS around how these complaints were dealt with. Firms were trying to understand what had driven this change, keep up with interpretations from the FOS and work out how to best deal with future complaints.”

“In the year following the jump in uphold rate for home credit, complaints rose from around 1,500 to over 22,500. The picture is very similar on guarantor loans. With the current FOS case fee of £750, it is easy to see how this number of complaints becomes untenable for firms.”

“There is a clear connection between FOS uphold rates increasing and a sharp rise in complaint volumes soon afterwards. This is likely to have been caused by the ‘claims culture’ being driven by CMCs, looking for other sectors to exploit after PPI. The actions of the FOS have effectively encouraged more complaints, some of which are purely speculative.”

“We will continue to raise the concerns of our members around a constantly evolving approach from the organisation and their lack of action to push back on CMC poor practice.”