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ombudsman news

issue 47

July 2005

ask ombudsman news

can claims management company improve chances of success- the manager of a consumer advice bureau writes...

One of our clients has seen an advertisement for a company that can handle his mortgage endowment complaint for him (for a fee). He has asked us whether employing this firm would improve his chances of getting his complaint sorted. We would be interested to know your view.

Financial firms have to handle mortgage endowment complaints according to guidelines set out by the industry regulator, the FSA. So consumers should not need any special help or support with their complaints.

The ombudsman service is a free and informal way of getting disputes resolved, if consumers remain unhappy with the way a firm has handled their complaint. We decide if a complaint is valid by looking at the facts of the case – and we prefer to hear from consumers in their own words.

Our statistics show that there is no difference in outcome between complaints brought to us on behalf of consumers by claims management companies (sometimes called "no win, no fee" agencies), and complaints that consumers bring direct to us themselves. In other words, we are no more or less likely to uphold a complaint that is referred to us through a claims management company.

If a consumer decides to employ a claims management company they will have to pay the company's costs. This could mean paying the company a part of any compensation that is awarded.

which firms are the most complained about- an IFA emails us...

Is it true that of the large number of mortgage endowment complaints bought to the Financial Ombudsman Service, the majority concern independent financial advisers (IFAs)- Is there any way of finding out who is the most or least complained about for each type of complaint-

We received 70,000 mortgage endowment complaints last year, a rise of 34% on the previous year – so it’s true that we have been receiving a large number of these complaints. However, it isn’t correct that the majority of these complaints involve IFAs.

We have recently published our annual review (for the year ending 31 March 2005) and in the chapter who the complaints were about we show which financial products and sectors are the most – and least – complained about. These statistics show that 13% of mortgage endowment complaints involve IFAs – while life insurance and investment product providers have the largest share of these complaints with 49%.

Walter Merricks, chief ombudsman

ombudsman news issue 47 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.