The power to settle financial complaints.
The power to settle financial complaints.
The Financial Ombudsman Service’s policy on publishing complaints data relating to individual named businesses, including the background and the reasons, was set out in our policy statement (March 2009), publication of complaint data: what we will do.
As we explained in that policy statement, we publish complaints data about individual named businesses every six months, covering January to June and July to December. The first set of data (for January to June 2009) was published in September 2009.
For each financial business covered, we publish:
The data we publish is listed against the relevant legal entity (FSA-regulated firm and/or OFT-licensed credit business) – listed alphabetically – rather than against trading names (brands) or against any larger group of which the legal entity forms part. But additionally:
To ensure that the data – particularly the uphold-rate data – is statistically meaningful, we exclude from the published data any legal entity that did not have at least 30 new cases and 30 closed cases during the period (even if it formed part of a larger group). The published data covers around 150 legal entities.
The number of new cases is, in effect, the number of new chargeable cases during the period. Our computer system counts them as part of the case-conversion process, when a complaint enquiry becomes a (chargeable) case.
At the same time, our computer system generates a "case-conversion" letter to the legal entity concerned – so financial businesses can keep a tally of the number of new cases by totalling the case-conversion letters, using the date of the letter rather than the date of receipt.
The case-conversion letter is the one that:
If a financial business thinks the new case should be recorded against another legal entity, the financial business should say so when it receives the case-conversion letter – not later. And financial businesses in a larger group should always use the right letterhead when responding to consumers.
This data is based on cases where there has been a decision, or a settlement, on the merits. So it excludes cases that were out-of-jurisdiction and abandoned. Our case-closure letter says if we have recorded the case as "change" or "no change".
The case-closure letter is generated as part of our case-closure process, after the ultimate decision has been issued. The data is based on resolved cases closed during the relevant period. In the vast majority of cases, the case-closure letter will have the same date as the date the case was closed.
In cases closed following an ombudsman final decision (around 10% of cases) the date of closure is the date of the final decision. From 1 August 2009, in these cases, we have quoted the date of closure in the case-closure letter.
Financial businesses can keep a tally of the percentage by totalling the "change" and "no change" case-closure letters. The published percentage will be equivalent to "change" letters as a percentage of the total of "change" and "no change" letters.
In deciding whether the outcome is "change" or "no change", we compare the final outcome for the consumer when the resolved case was closed against the outcome for the consumer according to the last response from the financial business before the case-conversion letter.
If the final outcome for the consumer was better (whether by a large or small amount), we treat that as "change" – including where the financial business made an improved offer or agreed an improved settlement after the case-conversion letter. Businesses should not wait to see if a consumer refers a complaint to the ombudsman service before making a proper offer.
Where a financial business offered so-called "RU89" redress in a mortgage-endowment case (before case-conversion), and the final outcome is "RU89" redress, we treat that as "no change" – even if the "RU89" calculation would produce a higher figure at the later date.
If (after checking how we classify "change") a financial business disagrees with the outcome that the case-closure letter says we have recorded in a particular case, the financial businesses should write back to the adjudicator straight away – not later. If the financial business and the adjudicator are unable to agree, the issue will be escalated and a manager will check the outcome recorded.
As well as providing totals, we provide a breakdown according to the five product groups that the FSA uses for complaints reporting. For complaints data relating to periods from 2011 we also show payment protection insurance (PPI) as an additional separate group. Data relating to earlier periods does not show PPI separately.
We do not break down the percentage change for any product group where a particular business has fewer than (the statistically meaningful) 30 closed cases.
The five FSA product groups are:
We have agreed with the FSA how the (more numerous) product codes we use map to the five FSA product groups.
In late 2008 we brought together a group of representatives from industry trade bodies, consumer groups and the FSA – to begin a process to see whether they could agree how market-share could be measured and published as a way of providing a wider context to the complaints data we publish.
This group of trade and consumer stakeholders subsequently acknowledged in a formal note that it is not practicable for the ombudsman service to contextualise complaints data against market share in a fair and meaningful way – either across sectors or even within sectors. This does not, of course, prevent trade associations or individual financial businesses providing contextual information themselves.
KPMG – our internal auditors – checked the systems we put in place for recording the data at the time of initial publication. For the first four sets of data we published, they also sample-checked the data before publication.
For data relating to periods from 2011 – now that procedures are well established – KPMG sample-check the data on every third occasion, with checks carried out internally in the intervening cycles and submitted to our board's audit committee to give appropriate assurance.
As mentioned above, financial businesses can keep a tally of their own data from our case-conversion and case-closure letters.
We give the businesses concerned advance warning of the data we will be publishing about them – on the understanding that they keep this information confidential until publication. We do not provide background data or lists of case-reference numbers. This would not be practicable, given the large number of cases involved.
We publish the data on our website through a link from our existing complaints-data web page – so that it can be seen in the wider context of the types of complaints we receive.
There are separate tables for new cases received and resolved cases closed, showing (in sortable columns):
On new cases received, the explanatory notes point out that larger businesses are likely to have more cases than smaller businesses. But the industry/consumer working group set up to explore the issue was unable to come up with a workable way of comparing the data directly to market share.
On resolved cases closed, we note that:
We also publish – for comparison purposes – the average percentage change for all resolved cases closed in the relevant period (for all businesses, including those below the 30-cases threshold):