Complaints against personal financial services rose to record levels through 2008, the latest statistics show.
The Financial Ombudsman Service – the independent organisation that settles disputes between consumers and financial companies –has revealed that it received a 127, 471 new complaints for the 2008/09 financial year and received over 750,000 consumer enquiries.
In its annual review published today, the Ombudsman revealed that it resolved 113, 949 disputes, representing a 14 per cent annual increase. In 57 per cent of cases, the involvement of the Ombudsman resulted in compensation for the consumer.
Insurance disputes increase by staggering 84 per cent, including a rise in the number of complaints against motor, household and travel insurance while complaints about health insurance levelled off.
There was also a three-fold increase in complaints about payment protection insurance (PPI) – following a five-fold increase in the previous year.
While half of the total number of disputes related to six of the UK’s largest financial services groups – broadly in proportion to the amount of business they carry out with consumers – more than 95 per cent of businesses covered by the ombudsman service had no complaint referred to the service during the year.
Sir Christopher Kelly, chairman of the ombudsman service, said: “The financial world is a very different place now from a year ago – and the ombudsman, like everyone else, has been affected by the economic turmoil. For us it has involved dealing with a significant increase in the number of complaints arising from the impact of 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.”
