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annual review 1 April 2002 to 31 March 2003 - key facts and figures

dealing with complaints at the initial stage

Our customer contact division provides a ‘single point of entry’ for all consumer enquiries - by phone, letter and email. During the year we handled 462,340 ‘front line’ enquiries - a 19% increase on the previous year.

initial enquiries from consumers
year ended
31 March
2003
year ended
31 March
2002
year ended
31 March
2001
phone enquiries
265,554
242,168
259,848
written enquiries
196,786
146,071
154,874
total
462,340
388,239
414,722
complaints referred on to our adjudicators
62,170
43,330
31,347

Where consumers contact us before raising their complaint directly with the firm, our customer contact division forwards the complaint to the firm and asks it to investigate the matter under its formal complaints procedure. We remind consumers that if the firm is unable to resolve their complaint within eight weeks, then they can ask us to get involved directly.

Our customer contact division also gives general advice and guidance to consumers with enquiries. At this early stage, we try to nip straightforward problems in the bud - before they become full-blown disputes. For example, where a problem stems from a simple administrative error or misunderstanding between the customer and the firm, it might only take us a few phone calls to sort matters out.

An increasing number of consumers are also seeking the information they want directly from our website, rather than having to phone or write to us. More than 60,000 people are now visiting our website each month- and a third of these people are downloading our complaint form directly off the website.

Where further work is needed to resolve complaints, our customer contact division acts as the gateway to our specialist teams of adjudicators.

complaints referred on to our adjudicators

In the year ended 31 March 2003, our customer contact division referred 62,170 new cases to our adjudicators for more detailed dispute-resolution work - a 44% increase on the previous year.

new cases
by type of complaint
year ended
31 March
2003
year ended
31 March
2002
endowment policies linked to mortgages
13,570
14,595
mortgage loans
9,438
3,876
including complaints about
dual variable-rate mortgages
6,535
575
personal pension plans
7,233
5,881
including complaints about
personal pensions
4,907
5,051
purchased life annuities
223
242
guaranteed annuity contracts
223
30
income draw-down
189
46
small self-administered schemes and executive pension plans
162
39
stakeholder pensions
115
9
other ‘packaged’ investment products
6,917
2,858
including complaints about
single-premium investment bonds (including ‘high income’ bonds)
2,631
362
non-cash ISAs
1,581
329
PEPs
855
1,044
unit trusts
585
337
whole-of-life policies and non mortgage-linked endowments
5,009
3,647
motor insurance
2,372
1,609
splits’ and ‘zeros’
(in relation to investment trusts)
2,233
-
current accounts
1,602
1,280
other banking services
1,485
803
including complaints about
cheque clearance
239
49
cash machines
114
26
money transfer
111
34
buildings insurance
1,285
985
travel insurance
1,088
884
portfolio and fund management
1,044
449
contents insurance
1,009
780
other lending
933
556
including complaints about
unsecured loans
695
504
second charges
174
29
home income plans
64
23
other types of insurance
892
396
including complaints about
commercial policies
29
27
pet insurance
72
79
caravan insurance
52
48
free-standing additional voluntary contribution (FSAVC) schemes
887
198
credit cards
864
372
loan protection insurance
803
513
permanent health insurance (PHI)
792
504
savings and deposit accounts
748
1,230
including complaints about
TESSAs
109
36
cash ISAs
102
58
re-discovered passbooks and dormant accounts
76
12
stockbroking
503
620
critical illness insurance
492
408
private medical insurance
302
277
extended warranty insurance
254
335
legal expenses insurance
239
135
personal accident insurance
130
81
derivatives
46
58
including complaints about
spread-betting
35
12
options
10
4
total number of new cases
62,170
43,330

You can find more details and background information about the main types of new cases we received during the year in overview of complaint trends

new cases
by type of firm complained about

life insurers = 38%

banks and building societies = 22%

general insurers = 18.5%

advisory and broking firms = 13%

fund managers = 8%

credit unions and small friendly societies = 0.5%

new cases pie chart

Given the very wide-ranging nature of complaints we handle - from pet insurance to spread-betting - we have not included individual case studies in this annual review. The limited space here means we could not give a fair and representative overview of all aspects of our work. However, we include case studies in our regular newsletter, ombudsman news, which gives regular feedback on changing complaint trends, as well as commentary and briefing on our approach to different types of complaint. We hope that firms find ombudsman news a helpful source of reference - and that they will take its contents into account when considering how to handle complaints. To join the ombudsman news mailing list, please contact our communications team (phone 020 7964 0092). All issues of ombudsman news are also available on this website.

outcome of cases

During the year we resolved 56,459 cases - a 44% increase on the previous year. In dealing with each case, we use our extensive knowledge and experience of dispute resolution to decide the approach that we believe will be the most appropriate in the circumstances - and the most likely to settle the complaint quickly and fairly.

Generally, our approach will involve mediation or conciliation. This can be quicker and more efficient than a formal investigation, which can sometimes be quite a drawn-out process. If we cannot resolve a complaint by mediation or conciliation, we may need to take a more formal approach. This could mean issuing an adjudication, setting out our recommendations about whether the complaint should be upheld. In most cases, both sides accept these recommendations. But either side can instead ask for a review and final decision by an ombudsman.

The chart below shows the number of complaints we have resolved at each stage of our complaints-handling process.

outcome of cases
year ended
31 March 2003
year ended
31 March 2002
number of cases
% of total
number of cases
% of total
resolved by mediation or conciliation 22,312
40%
17,637
45%
resolved after investigation by an adjudicator 27,857
49%
15,678
40%
of which
13% mixed outcome (partial win/lose for both sides)
18% in favour of the consumer
69% in favour of the firm
of which
10% mixed outcome (partial win/lose for both sides)
23% in favour of the consumer
67% in favour of the firm
resolved by the final decision of an ombudsman 6,290
11%
5,879

15%
of which
15% mixed outcome (partial win/lose for both sides)
35% in favour of the consumer
50% in favour of the firm
of which
15% mixed outcome (partial win/lose for both sides)
29% in favour of the consumer
56% in favour of the firm
total cases resolved 56,459 39,194

 

average number of cases resolved per week by each adjudicator

2000 = 3.1

2001 = 3.3

2002 = 3.75

2003 = 4.9

year ended 31 March

average number of cases chart

number of cases resolved

2000 = 22,100

2001 = 28,400

2002 = 39,194

2003 = 56,459

year ended 31 March

cases resolved chart

our unit cost
- the benchmark against which we judge our cost-effectiveness in handling complaints - is calculated by dividing our total costs (before financing charges, establishment costs and any bad debt provision) by the number of cases we complete.

2000 = £730

2001 = £753

2002 = £684

2003 = £518

year ended 31 March

our unit cost chart

our budget and productivity

This is the first year that we have raised our income directly from firms - firms pay a case fee for each complaint we look into, as well as an annual general levy. Until this year we were mainly funded by service charges paid by the former complaints-handling schemes.

Our total income for the year of £36.2 million was £8 million above the budget. This was almost wholly due to the exceptional increase in the number of complaints we resolved during the year. This means that 58% of our funding was raised through case fees and 42% through the levy - whereas our budget had assumed that income from case fees and levy would be equal. The trend towards a greater proportion of our income being raised from case fees, rather than from our general levy, is set to continue next year - and formed part of the assumptions in our budget for 2003/04, on which we consulted in early 2003.

Our total expenditure for the year was £30 million, compared with a budget of £28.2 million. The increase in costs largely resulted from our needing to recruit additional staff during the year, to deal with the larger than forecast volume of complaints. We had 544 employees at the year-end, compared with a budget figure of 447. There was also an increase in direct costs - for example, postage and phone costs - relating to the increase in our workload.

Our unit cost has fallen to £518, compared with a budget figure of £688. This reduction is a result of the substantial increase in the number of complaints we resolved during the year - achieved through significant amounts of over-time worked by our staff.

Similarly, the increase in our productivity - measured by the average number of cases resolved weekly by each adjudicator, and rising to a figure of 4.9 during the year - has been achieved by many additional hours of over-time and by continued improvements in our case-handling procedures.

However, increased productivity at this exceptional level is not sustainable in the long term - and cannot be expected as part of our normal pattern of improvements in our cost-effectiveness.

The surplus for the year of £6.2 million was almost wholly due to the exceptional number of cases resolved in 2002/03. Our plan has always been to keep our reserves below £1 million, and to return any surplus to firms. Accordingly, we have written off against this surplus our establishment costs of £2.9 million, which were due to be collected from firms in 2003/04 and 2004/05. We will also take the projected level of our accumulated surplus into account, when we set our tariff and case fees for 2004/05 (see - financial statements for the year ended 2002/03).

our income and expenditure
(summary)
actual
year ended
31 March 2003
£ million
budget
year ended
31 March 2003
£ million
actual
year ended
31 March 2002
£ million
actual
year ended
31 March 2001
£ million
income
annual levy
14.7
14.1
0.0
0.0
case fees
21.1
14.1
3.5
0.0
former schemes' service charges
0.0
0.0
23.8
21.0
other income
0.4
0.0
0.2
0.1
total income
36.2
28.2
27.5
21.1
expenditure
staff-related costs
20.5
19.7
18.6
15.5
other costs
6.6
5.2
6.1
4.4
interest
0.4
0.7
0.7
0.6
depreciation
2.5
2.6
1.8
0.1
total expenditure
30.0
28.2
27.2
20.6
exceptional item - write-off of establishment costs
2.9
0.0
0.0
0.0
surplus
3.3
0.0
0.3
0.5

fact filefrom 16 to 102

  • The youngest person to bring a complaint to the ombudsman service during the year was a 16 year old from the West Midlands - in dispute with his bank about his cashpoint card.
  • Our oldest customer during the year was a 102 year old from Scotland, complaining about losses in relation to his 'splits' investments.

how old are people who complain to the ombudsman?

35 to 44 =25%

45 to 54 = 25%

55 to 64 = 24%

65 or older = 16%

25 to 34 = 9%

younger than 24 = 1%

pie chart

Our ‘average’ customer is between 35 and 54 years old. Half the people who use our service are in this age bracket, although it represents only a third of the population as a whole. This appears to reflect the fact that people in this age group tend to have wider levels of ownership of financial and investment products. As this is the home-buying generation, a significant proportion of the complaints we receive from people aged between 35 and 54 relate to mortgage endowments.

16% of our customers are above the age of 65 - last year this figure was 10%. People in this age group make up 20% of the population as a whole. As the population ages, and people over 65 come to rely increasingly on private savings and investments in retirement, we may see a continued rise in the number of people in this age group using the ombudsman service.

where do people live who complain to the ombudsman?

East Anglia = 4%

Northern Ireland = 1%

South East = 22%

Greater London = 14%

South West = 11%

North West = 11%

Yorkshire/Humberside = 8%

West Midlands = 8%

Scotland = 7%

North East = 5%

East Midlands = 5%

Wales = 4%

pie chart

We do not yet have sufficient reliable external data to help us compare the levels of ownership of financial products across the different regions of the UK with the levels of complaints we receive from people living in those regions. But we have compared our own figures that show where people who complain to us come from with the census figures that show where people live in the UK.

This comparison suggests that the geographical location of those using our service broadly reflects the spread of the population across the UK as a whole. Our research shows a variance of more than one or two percentage points in three regions only - the same regions, and exactly the same percentage variances, as last year.

People from East Anglia comprise 9% of the population but 4% of our customers. Conversely, people from the South West comprise 8% of the population but 11% of our customers. 22% of people who used our service came from the South East (home to 14% of the UK population). This reflects the fact that there appear to be proportionately higher levels of ownership of financial and investment products in the South East.

customer diversity

Our customer surveys indicate that around 5.5% of people who use our service define themselves as ‘minority ethnic’. We plan to carry out more research here, to try to find out how this figure compares with the general levels of ownership of financial and investment products among people from minority ethnic communities.

For people who are not comfortable using English, we can provide information and handle phone calls in other languages - and have done so during the year in languages ranging from Albanian to Welsh. During the year we also distributed 5,000 language packs to Members of Parliament - for use when advising constituents - as well as to consumer advice centres across the UK. These packs contain factsheets about the ombudsman service in the UK’s ten most frequently used ethnic languages.

Our research suggests that 12% of our customers have some form of disability - predominantly mobility difficulties, sight or hearing impairment. There is strong demand for our publications in Braille, large print and on audiotape - and we use TypeTalk and sign-language on request. This is part of our commitment to be flexible and accommodate our customers’ needs wherever we can.

Each month we send a customer satisfaction survey to a random selection of around 350 people whose complaints we have dealt with, asking a range of questions about their experience of our service. The feedback we receive from these monthly surveys tells us what our customers want and expect from us - and where we need to focus our priorities in terms of the service we provide. The bar charts above shows how customers who have completed the survey rated our service - measured against a number of customer service benchmarks.

how do people who complain to the ombudsman rate the service we provide?

we keep consumers well informed about progress on their complaint
83% agree
17% disagree
we explain clearly the reasons behind our decisions
76% agree
24% disagree
we resolve complaints within an acceptable length of time
71% agree
29% disagree
our staff remain polite at all times
96% agree
4% disagree
people who use our service are likely to recommend it to friends and family who have a financial complaint
79% agree
21% disagree

the way people complain

Each month we send a customer satisfaction survey to a random selection of around 350 people whose complaints we have dealt with, asking a range of questions about their experience of our service. The feedback we receive from these monthly surveys tells us what our customers want and expect from us - and where we need to focus our priorities in terms of the service we provide. The bar charts above show how customers who have completed the survey rated our service - measured against a number of customer service benchmarks.

communication and information-sharing

getting our message across year ended 31 March 2003
our technical advice team
(general guidance and advice on ombudsman practice and procedures - for professional complaints-handlers in firms and the consumer advice sector)

Our technical advice desk handled 16,945 enquiries, comprising:

  • 12,853 calls from financial services practitioners
  • 2,849 enquiries from consumer advisers
  • 1,243 calls from trade associations, researchers, official bodies etc.
conferences We held 9 working together conferences across the UK.
exhibitions and roadshows We took our exhibition stand to 21 tradeshows and consumer roadshows.
speeches and presentations We spoke at 73 seminars, conferences etc.
visits and workshops for consumer advisers We visited 65 consumer advice organisations, such as trading standards departments and citizens advice bureaux.
visits and training for firms We visited 240 financial services providers - from local credit unions to global investment banks.
industry meetings and seminars We took part in 110 liaison meetings for groups of financial services practitioners.
media enquiries We handled over 3,000 enquiries from newspapers, magazines and TV/radio stations.
website hits Over 15,000 people a week visited this website
publications We printed and distributed over one million copies of our publications (including our leaflet, your complaint and the ombudsman, and 12 editions of our regular newsletter, ombudsman news).

useful links