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annual review 2009/2010

1 April 2009 to 31 March 2010

who the complaints were about

businesses complained about - by sector

This table shows how the new complaints we received in the financial year 2009/2010 were spread across the different sectors of the financial services industry.

businesses complained about - by sector %
banks 61
general insurers 11
life insurance and investment product-providers 8
general-insurance intermediaries 8
mortgage intermediaries 4
independent financial advisers (IFAs) 2
building societies 2
businesses with a consumer-credit licence 2
other (including fund managers and stockbrokers) 2

The overall proportion of disputes relating to banks rose by 2%, reflecting the 85% increase in complaints about current accounts, as well as the increased volume of complaints about payment protection insurance (PPI) during the year. The 3% rise in the proportion of cases involving general-insurance intermediaries also relates to the increasing PPI caseload.

The proportions of cases involving life insurance and investment product-providers, and independent financial advisers (IFAs), continued to decline - by 3% and 1% respectively - reflecting the levelling-off generally of complaints to the ombudsman service about investments and pensions.

financial products most frequently complained about - by sector

These tables show how new complaints involving the products most frequently complained about to the ombudsman service were spread across the different sectors of the financial services industry.

complaints about banking and credit %
banks 83
mortgage intermediaries 6
businesses with a consumer-credit licence 5
building societies 3
other 3
complaints about mortgages %
banks 64
mortgage intermediaries 18
building societies 9
other (including IFAs) 9
complaints about general insurance %
general insurers 73
insurance intermediaries 13
life insurance & investment product-providers 7
banks 3
Society of Lloyd's 1
other (including cash-plan health insurers) 3
complaints about payment-protection insurance (PPI) %
banks 70
insurance intermediaries 22
general insurers 4
other (including building societies) 4
complaints about investment products %
life insurance & investment product-providers 45
banks 29
independent financial advisers (IFAs) 12
stockbrokers and fund managers 5
other (including building societies, friendly societies and credit unions) 9
complaints about pensions %
life insurance & investment product-providers 48
independent financial advisers (IFAs) 28
banks 10
other (including building societies and stockbrokers) 14

outcome of cases - by sector

Earlier on in this annual review we show the outcome of complaints in relation to the financial products which we receive most complaints about. For these products, the proportion of cases we upheld in favour of consumers ranged from 20% to 89%.

We also mention the six-monthly sets of data published on our website - relating to the 150 or so individual businesses that together generate around 90% of our complaints workload. This data shows the number of new complaints - and the proportion of complaints we upheld in favour of consumers - for each of these businesses.

The table below shows the outcome of cases in the financial year 2009/2010 - by sector.

% of complaints where the outcome changed as a result of our involvement ("we upheld the complaint") %
banks 52
general insurers 44
life insurance and investment product-providers 31
intermediaries selling payment protection insurance (PPI) 94
intermediaries selling general insurance 42
intermediaries selling banking and/or mortgage products 48
independent financial advisers (IFAs) 39
building societies 25
businesses with a consumer-credit licence 53

how often do businesses have complaints about them referred to the ombudsman?

  • 2,259 businesses each had 1 complaint referred to the ombudsman during the year
  • 584 businesses each had 2 complaints to the ombudsman
  • 293 businesses each had 3 complaints to the ombudsman
  • 525 businesses each had between 4 and 10 complaints to the ombudsman
  • 165 businesses each had between 11 and 20 complaints to the ombudsman
  • 165 businesses each had between 21 and 50 complaints to the ombudsman
  • 76 businesses each had between 51 and 100 complaints to the ombudsman
  • 67 businesses each had between 101 and 250 complaints to the ombudsman
  • 22 businesses each had between 251 and 500 complaints to the ombudsman
  • 44 businesses each had more than 500 complaints referred to the ombudsman during the year

Customers of over 100,000 businesses that provide financial services have the statutory protection of the Financial Ombudsman Service, should a dispute arise. This includes 80,000 businesses with a standard consumer-credit licence issued by the Office of Fair Trading (OFT) and banking, investment and insurance firms regulated by the Financial Services Authority (FSA).

These businesses range in size from global financial services groups to sole traders providing credit as a sideline to their main business. This range in size is reflected in the number of complaints we receive about the different businesses we cover - which followed a very similar pattern during the year to previous years.

In the financial year 2009/2010 four of the UK's largest financial services groups accounted for 84,718 cases (52% of all the complaints we received). At the other end of the scale, 183 cases (0.1% of all complaints) related to friendly societies, and 14 complaints involved credit unions.

During the year we published - for the first time - "business specific" complaints data showing the number of new cases, and uphold rates, for each of the 150 or so financial businesses that together generate some 90% of our workload.

75% of the businesses that had complaints referred to the ombudsman service during the year had fewer than four complaints. This meant that these businesses paid no case fees - as again we did not charge for the first three complaints during the year.

how do businesses rate our service?

We carry out quarterly surveys to gauge the views of the businesses we deal with. These surveys cover all sectors of the financial services industry, ranging from sole-proprietor businesses to the largest financial groups.

  % who agree % who express no view % who disagree
the financial services industry can have confidence in the ombudsman service 56 22 22
our service is good value for businesses who pay the levy/case fees that fund us 36 36 28
our decisions on cases are fair and unbiased 62 21 17
our decisions are consistent 41 29 30
we provide a good dispute-resolution service for businesses 63 22 15

The proportion of businesses who agreed with these statements during the year slipped overall by 3%. Feedback on the industry's level of confidence in the ombudsman service clearly reflected disquiet in some sectors about our publication of complaints data on individual named businesses.

Smaller businesses with fewer complaints were generally below the threshold for inclusion in the complaints data we published. This may explain why levels of satisfaction expressed by smaller businesses were higher during the year than those recorded for larger businesses. For example, smaller businesses rated us 10% higher on the consistency of our decisions than larger businesses.

It is disappointing to see that a significant number of businesses are still unable or unwilling to express a view on our performance in areas which we believe are key to our work.

liaison with financial businesses and trade associations

External-liaison work we have carried out during the year with the financial services industry includes training and guidance on complaints-handling and the work of our technical advice desk in supporting and educating businesses on complaints prevention.

As well as the regular contact we continue to have with businesses and their trade associations at this operational level, we have also always had more formal arrangements in place for strategic dialogue with the financial services industry.

During the year we consulted with industry stakeholders on how these more formal arrangements were working. This has resulted in agreement to replace the three sectoral liaison-groups for banking, insurance and investment - that have provided a channel for more formal communication between the ombudsman and the industry over the last few years - with a small cross-sector industry steering group and a wider cross-sector industry panel.

These changes - which took effect from April 2010 - involve our chairman, Sir Christopher Kelly, chairing the high-level steering group which brings together eight chief executives of key financial services institutions. This group discusses strategic issues such as major trends in complaints and the mechanisms for handling "mass claims" from consumers.

Membership of the wider cross-sector industry panel includes all the organisations previously represented on the three former industry liaison-groups - with additional members from consumer credit, electronic money and payment services.