19th May 2015
The ombudsman has revealed it answered 15 million consumer enquiries in the 15 years since its launch and highlighted the growing scandal of the mis-selling of fee-charging current accounts.
The Financial Ombudsman Service has published its annual review 2014/15 on the fifteenth anniversary of its inception, revealing that over its lifespan so far it has taken on a total of 2.8 million disputes between financial businesses and their customers. It said that 1.8 million disputes have been related to just three issues – mortgage endowments, bank charges and payment protection insurance.
A new scandal appears to be brewing, though, as complaints about packaged bank accounts, which have a monthly feee and come with extras like insurance, have risen by 278% in the past year.
Over the past year, the Ombudsman answered a total of 1.8 million enquiries and resolved 448,000 cases – compared to 400,000 enquiries and 30,000 cases in 2000/2001.
PPI made up two-thirds of all complaints in 2014/2015 – the same proportion as the mortgage endowment workload at its peak a decade ago. This was despite the number of PPI complaints halving to 204,943, from the record highs in 2013/14.
In total there have been 1.3 million PPI complaints over the years.
The Ombudsman resolved 55% of cases in the consumer’s favour over the past year.
During 2014/2015 the ombudsman settled 448,387 disputes about an array of financial products from annuities to warranties.
The Ombudsman says that while the continuing heavy volumes of entrenched PPI disputes could still take years to work through, concerns about credit broking and payday loans, for example, are now being resolved in just a matter of days.
Chief ombudsman, Caroline Wayman, says: “The world has moved on and changed significantly since I first joined the ombudsman as an adjudicator in 2001. Yet our workload over the last 15 years has been constantly dominated by the past – clearing up the fall-out of the mass claims and mis-selling scandals of the last decade and a half.
“But 15 years of sorting out millions of these problems have given us unparalleled experience, knowledge and understanding of why complaints happen – and how they could be avoided in future. That’s why our focus continues to be on complaints prevention and sorting things out pragmatically as soon as problems emerge.
“And that’s also why it’s so important that lessons are learned from what’s gone wrong in the past – to prevent yesterday’s problems from becoming tomorrow’s complaints – and to help ensure financial services evolve to meet the needs of today’s customers.”
David Mann, head of money at uSwitch, the price comparison service, says: “It’s encouraging to see PPI complaints finally levelling off, but there could be another storm brewing – mis-selling of packaged accounts. Replacing one scandal with another really isn’t good news.
“Banks need to be transparent about what is included in packaged accounts. Offering people clear and simple information so that they can see exactly what they’re paying for and how much it will cost them will help stop them feeling ripped-off.
“As for those who still don’t feel that their bank is giving them the service they deserve, with more choice offered by challenger banks and switching taking just seven working days, it’s easier than ever to vote with your feet.”