Financial complaints double in a year
The number of complaints about financial companies has almost doubled in the last year, the Financial Ombudsman Service (FOS) has found.
The ombudsman, which resolves disputes between consumers and financial companies, saw a record 508,881 new cases, an increase of 92% on last year.
Nearly three quarters (74%) of disputes taken to the FOS are over payment protection insurance (PPI), with it seeing 378,699 cases about PPI, more than double last year.
Natalie Ceeney, chief ombudsman, said: "As levels of confidence in financial services have eroded, it is disappointing that we still haven't seen any significant improvement in complaints handling.
"Too many financial businesses still seem unable to sort out problems themselves, without the ombudsman having to having to get involved."
The report found a growing number of older people are going to the FOS for help, with one in four people who use the ombudsman over 65, double the proportion four years ago.
‘FCA must take action'
The annual review from the FOS showed four of the UK's largest banking groups make up 62% of all complaints received, an increase of 10% from last year.
One in four enquiries made to the FOS go on to become a formal dispute, up from one in five in the two previous years, with nearly half (48%) of cases resulting in compensation for the consumer.
Richard Lloyd, Which? executive director, said: "These shocking figures show banks are still letting their customers down and failing to help consumers with legitimate claims get the compensation they're rightly owed.
"The Financial Conduct Authority must take tough action against any bank found its feet in settling complaints. It's time for a big change in banking, with banks that work for customers, not bankers."
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.