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FOS Complaint Data – A waste of resources, costs, delay and stress!

Today the Financial Ombudsman Service [FOS] published its complaint data for the six-month period to 31 December 2017. The data features complaint numbers about banks, insurance companies and other financial businesses received by the ombudsman service.

There are some positive features, for example:

  • 219 businesses feature in the complaints data – down by 11% when compared to the first six months of 2017. This shows a positive improvement in firms handling of complaints.
  • FOS received a total of 165,406 new complaints – a decrease of 3% when compared to the first half of 2017 (170,083). Although this reduction only shows a slight improvement, any improvement is welcome and hopefully, a sign that more firms are becoming more customer focused and resolving more disputes without the need of an external dispute resolution service.

FCA – PPI deadline awareness campaign is questioned

The industry was expecting to see an increase in Payment Protection Insurance [PPI] complaints. There was a slight increase 3% (the 89,513 first half of 2017 increased to 92,231), but this shows the expected large increase did not materialise and re-enforces commentators concerns about the ineffective FCA – PPI deadline awareness campaign.

Pay Day Loan consumers ridiculed!

There was a noticeable and weighty increase in consumer credit complaints, up 11% (the 14,752 first half of 2017 increased to 16,328). This is of concern as payday lending will fall into this category – readers will recall that these types of complaint were ridiculed during the Channel 4 Dispatches programme aired on 12 March 2018.

A waste of FOS resources cost and delay

Firms on both sides of the complaint fence, product providers and claims management companies [CMCs], are expected to learn from previous FOS adjudications – that is reasonable as precious FOS resources should not be required where there is a complaint with common features and previous precedents. On that basis, it remains surprising that there are still 9 firms who have more than 80% of the PPI complaints they rejected overturned by FOS. This means they have received a complaint, rejected it, the complaint has then been referred to FOS who have overturned the rejection. Surely, this unnecessarily wastes FOS resources and pointlessly puts the customer through delay and distress.

The firms who top this ‘naughty step’ are:

Business name Uphold percentage in favour of the complainant
American Express Services Europe Limited 97%
Aviva Insurance Limited 96%
Clydesdale Bank Plc 90%
Shop Direct Finance Company Limited 88%
J D Williams & Company Limited 86%
Creation Consumer Finance Ltd 85%
HFC Bank Limited 82%
Ulster Bank Ltd 82%
NewDay Ltd 81%

Although some of the above names may not be known to consumers they are often the names behind high volume product sales. For example, the Creation Consumer Finance Ltd website ‘about us’ states “Creation Consumer Finance Limited offers retail finance for larger purchases including furniture and cars on behalf of our partners including DFS, Currys, Sony and many more.” Likewise, the overview page of the NewDay website states, “We also provide credit card products in partnership with a number of established UK retailers.” These overturn percentages are not new, for example the NewDay overturn percentage for the previous seven, six-months periods has been 74%, 81%, 94%, 95%, 94%, 90% and 96%.

Add to the FOS review

The above percentages show that FOS has failed to change behaviours in this area. The House of Commons Treasury Committee are already asking probing questions of FOS (since the Channel 4 Dispatches programme). The FOS Board have, or are about to instruct an independent ‘skilled person’ to carry out a review of FOS; this area should be added to the review agenda so FOS resources are not wasted and consumers are better served.

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