Financial complaints at record high

Customer dissatisfaction with financial firms has reached record levels with half a million new complaints dealt with in the last year, the ombudsman service has said.

The Financial Ombudsman Service (FOS), which settles disputes between consumers and financial firms, said businesses are still failing to do enough to clear up complaints themselves, meaning that consumers are increasingly turning to the service to step in.%VIRTUAL-SkimlinksPromo%
In its annual review, the service said it has seen its caseload almost double in the year 2012/13, as it tackled a record 508,881 new cases, marking a 92% annual increase.

Four of the UK's big banking groups - Lloyds, Barclays, HSBC and Royal Bank of Scotland (RBS) - accounted for almost two-thirds (62%) of all complaints received by the ombudsman, increasing their share from 52% the previous year.

More than two million inquiries from consumers were handled by the ombudsman service over the year, equating to over 7,000 calls each working day. Over the course of the year, 49% of cases were upheld by the ombudsman in the consumer's favour, including 69% of complaints relating to payment protection insurance (PPI).

The PPI scandal drove the upswing in complaints, making up almost three-quarters (74%) of the cases dealt with by the service. Complaints about PPI more than doubled year-on-year.

Meanwhile, complaints about current accounts rocketed by over one third (34%), following two years of declines. A "substantial" increase in complaints about paid-for or "packaged" current accounts was also seen by the service.

Complaints about mortgages went up by one quarter (25%) over the year, with the majority of these relating to admin errors such as incorrect monthly repayment calculations. There were also 542 complaints about payday lenders, marking an 83% year-on-year increase.

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 get involved."

Richard Lloyd, Which? executive director, said: "These shocking figures show the 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 dragging its feet in settling complaints."

Most complained about financial products
See Gallery
Financial complaints at record high

Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship.

Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so.

To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension.

In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.


More stories
Read Full Story