Complaints about financial companies hit a record high in the last financial year, with disputes about mortgages, credit cards and insurance jumping by up to 84%.
The Financial Ombudsman Service (FOS), the independent organisation that settles disputes between consumers and financial companies, handled 789,877 consumer enquiries last year, of which 127,471 were new complaints.
Of these, 113,949 disputes were resolved and 57% of consumers received compensation. Around half of the total complaints received by the FOS related to just six of the UK's largest financial services groups.
Sir Christopher Kelly, chairman of the FOS, says the rise in complaints reflects the worsening financial climate.
“As businesses tighten their belts – and the credit crunch leads to increased financial difficulty for many consumers – we are gearing up to deal with further volatility in complaint volumes,” he adds.
Increasingly, the FOS says it is seeing complaints come from ‘blue-collar’ workers, with a 17% rise in the past year. In contrast, disputes brought by those from professional backgrounds fell by 18%.
Doug Taylor, personal finance campaigns manager at Which?, is concerned that not enough disputes are being resolved by the FOS.
"It's shameful that some firms are dismissing so many justified complaints that are upheld," he adds. "This could be just the tip of the iceberg as many people give up at the first hurdle rather than going to the Ombudsman. Companies have a duty to treat their customers fairly and this means giving all complaints due consideration and, if appropriate, accepting them."
Complaints about mortgages, credit cards and consumer credit rose by 34%
Car, household and travel insurance disputes increased by 84%
Complaints relating to payment protection insurance were up three-fold
Investment bond complaints more than doubled
Complaints about mortgage endowments fell by more than half
Health insurance complaints levelled off
Pension complaints are down by 9%