Financial complaints reach record high
More than two million complaints from disgruntled financial services customers flooded into the ombudsman over the past year.
The Financial Ombudsman Service answered 40,000 queries from the public each week and settled a record 518,778 disputes, which was more than double the amount from last year.
In more than half of cases resolved, the ombudsman found in the consumer's favour - with 58% of those financial services customers receiving compensation.
Some 63% of complaints were to do with the big four banking groups - Lloyds, RBS, HSBC and Barclays.
Other than PPI, most new complaints received were to do with current accounts, mortgages and credit cards.
Complaints about packaged bank accounts tripled over the period, while those about credit cards almost halved.
Tony Boorman, chief ombudsman, said: "It's been an unprecedented 12 months for the ombudsman by anyone's standards. Complaints continued at record levels - and we resolved over half a million cases during the year.
He added: "Each case we see tells a story about the lives and livelihoods of the individuals involved. In our experience, people are simply looking for honest, straightforward answers that show someone has listened and helped make sense of things.
"So whether it's dealing with a complex pension complaint or problems with a mobile banking app, the financial services sector continues to face the challenge of putting the customer at the centre of their business."
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.
The practice of a dishonest salesperson misrepresenting or misleading an investor about the characteristics of a product or service. For example, selling a person with no dependants a whole-of-life policy. There have been notable mis-selling scandals in the past, including endowment policies tied to mortgages, employees persuaded to leave final salary pensions in favour of money purchase pensions (which paid large commissions to salespeople) and payment protection insurance. There is no legal definition of mis-selling; rather the Financial Services Authority (FSA) issues clarifying guidelines and hopes companies comply with them.
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.