skip tocontent

ombudsman service publishes annual review of personal finance disputes

29 June 2005

The Financial Ombudsman Service - the organisation that resolves disputes between consumers and financial firms - today publishes its annual review for 2004/05.

The review shows that during the year the ombudsman service:

  • Received over 600,000 front-line enquiries and stepped in to investigate 110,000 new disputes - a 13% increase on the previous year.
  • Resolved 55% of disputes informally by mediation; 38% by recommended settlements; and just 7% of cases by formal ombudsman decisions.
  • Dealt with a 34% increase in mortgage endowment complaints - rising to 70,000 new cases in the year (two-thirds of all disputes). This means the ombudsman is now receiving 1,300 new mortgage endowment complaints every week - compared to 300 a week just three years ago.

Commenting on the continued high volumes of mortgage endowment disputes being referred to the Financial Ombudsman Service, chief ombudsman, Walter Merricks, said:

We dealt with a record number of mortgage endowment disputes last year. The number we can expect to receive in the current year will largely be determined by how financial services firms meet the new regulatory requirements on so-called "re-projection" letters - several million of which will be sent to consumers with endowment policies over the coming year. Most of these letters will warn of likely mortgage shortfalls and many will give, for the first time, an explicit deadline by which any complaint must have been lodged. These letters could result in significant increases in the numbers of consumers contacting their endowment provider - and in sudden bulges in complaint volumes.

The industry regulator, the FSA, has already found evidence of serious shortcomings by some firms in the handling of endowment complaints. So this year's cycle of "re-projection" letters will be more testing and complex than before. To ensure that consumers are properly served, effective communication and co-ordination is essential between firms, the FSA and the ombudsman service. This should mean that the vast majority of consumer complaints can be dealt with by firms to the satisfaction of consumers. We stand ready to deal with the small proportion of cases where disputes are inevitable and agreement cannot be reached.

Other statistics from the annual review show:

  • Motor insurance complaints down by 6%; travel insurance complaints up by 5%.
  • Investment-ISA complaints down by half; cash-ISA complaints up three-fold.
  • 85% of financial firms had no disputes referred to the ombudsman service; but ten of the UK's largest financial services providers together accounted for over half of all new complaints.
  • 42% of consumers who used the ombudsman service came from the South, 19% from the Midlands, 25% from the North, and 14% from Scotland, Wales and Northern Ireland.

notes for editors

The Financial Ombudsman Service was set up by law to help consumers settle unresolved disputes with banks, building societies, mortgage firms, insurance companies, investment firms, financial advisers and stockbrokers. Complaints covered by the ombudsman service range from travel insurance and pension plans to mortgages and savings accounts.

The Financial Ombudsman Service can step in to help resolve disputes where the consumer has already complained to the financial firm and remains dissatisfied. Consumers with an unresolved complaint can get in touch with the Financial Ombudsman Service on 0845 080 1800.

media enquiries

  • David Cresswell – phone 020 7964 0134
  • Emma Parker – phone 020 7964 0966
  • out of hours – phone 0771 8658 306

news image

Downloadable PDF version [opens in new window]

useful links