New figures show the UK’s banks and insurers are still failing to deal adequately with customer complaints. So it’s good to know we’ve all got the Financial Service Ombudsman on our side.
Just as Spiderman serves to protect the people from evil, here in our own little corner of the universe, we’re increasingly turning to the Financial Ombudsman Service (FOS) to protect us from the worst practices of the UK financial services industry.
According to its newly published annual report, the FOS handled over two million enquiries and complaints in the past year. This resulted in a record half-a-million new formal disputes – almost double the previous year’s total.
Not treating customers fairly
These figures demonstrate once more that the UK finance industry is failing to treat its customers fairly. And to rub salt into the wound, companies too often compound this failure by botching the way they deal with legitimate complaints.
While PPI is still the biggest cause for complaint, no area of financial services is immune. From catalogues to pensions, cash machines to life insurance, complaints are rising fast. And these aren’t all small-scale financial providers either. In fact, 62% of FOS cases in the last year related to just four banking groups.
Overall, 49% of the cases dealt with by the FOS resulted in compensation for the customer. That means that almost half of all complainants were ill-served by their financial services provider. If those people hadn’t taken their complaints to the FOS, they might’ve been left out of pocket, or looking to the courts to get redress.
FOS on my side
We hear the odd grumble about how long it takes the FOS to deal with complaints. But faced with two million queries a year, it’s easy to see why it can take a while. Instead, we should be criticising the banks and insurers who cause the problems in the first place. If financial firms held up their hands when they made a mistake and put things right, the FOS wouldn’t have had to deal with a 92% year-on-year increase in its workload.
The new regulator, the Financial Conduct Authority (FCA), has the potential to demonstrate its own super-powers by taking tough action against any bank found dragging its feet when settling complaints. In the meantime, faced with over-powerful financial firms, I for one am glad to have the FOS on my side.