Record rise in financial services complaints

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.”

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