By Nick Baxter
22nd September 2017

The six-monthly release of the Financial Ombudsman Service [‘FOS’] complaints data have just been issued and this data includes information to the end of June 2017. The information shared by FOS shows that while many firms are improving the way they handle complaints many aren’t. What do I mean? Taking Payment Protection Insurance [‘PPI’] as an example, there were five major businesses where, FOS found in favour of the customer in more than 75% of the cases referred to it (three firms where findings against the firm were above 90%).

Are firms considering PPI complaints effectively?

Such performances are extremely disappointing; let’s not forget the services of FOS are engaged only when a firm and customer cannot resolve their differences between themselves and then call on the services of FOS to help resolve the dispute. This means it’s not surprising that FOS will sometimes agree with the customer and sometimes the business. Firms should not be criticised simply because cases are referred to FOS or that FOS find in favour of the customer in a percentage of cases. The million-dollar rhetorical question, what percentage of decisions in favour of the customer indicates that the firm is not considering complaints effectively? What is beyond dispute is that it should not be as high as the percentages highlighted in the first paragraph of this blog.

Lloyds and Barclays continue to improve

So what is the difference between firms that can be seen to be improving their complaint handling processes, such as Lloyds Bank plc and Barclays, and the firm with the worst percentage of decisions found against them (NewDay Limited). The PFCA has been tracking the FOS complaint data outputs over a number of years. These firms’ performance is shown in the following graph:

The NewDay Limited FOS data is clear for anyone to see. It is clearly inappropriate that so many cases are referred to FOS to be upheld in favour of the consumer (96%) and its clear the position is not improving. Anyone can see that this is a waste of FOS resources which inevitably results in an unnecessary workload at FOS which delays all claims.

Financial Conduct Authority [‘FCA’] fires a warning shot over product providers bows.

Against this backdrop the FCA has told firms that it will crackdown on product providers who do not deal with PPI complaints adequately. With a PPI complaints deadline now in place it seems that there is a need for regulators to be proactive rather than reactive. For example, the FCA has the power to force a financial institution to write to customers who have had PPI. The performance data which has been tracked by the PFCA could give the FCA a starting place to consider using such powers earlier rather than later.