Financial services complaints increase

Posted by Jon Wilcox in Management & Execution, Industry Sectors on Mon, 01/03/2010 - 10:58
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Over 82,100 complaints were made against the financial services sector during the final six months of 2009, according to a new report from the Financial Ombudsman Service (FOS). The figure represents an 18% increase compared to the first half of last year, when 69,841 complaints were raised.

“While the number of cases referred by consumers to the ombudsman has continued to increase substantially, it’s encouraging to see that some businesses are committed to handling complaints better,” David Thomas, interim chief ombudsman commented about the figures.
 
“However, there is evidently still room for significant improvement in the way other financial businesses handle complaints – judged by the proportion of cases where we overturn the decision that the businesses have themselves come to in their own earlier investigation of their customer complaints.”
 
The FOS covers more than 100,000 businesses in the sector, including banks, insurance companies, and investment firms; the new report reveals that 88% of all new cases related to just 155 financial companies.
 
However, the report also revealed a reduction in the percentage of rulings made in favour of consumers, down from 59% in the first half of 2009 to 53%.
 
“The data we have released clearly shows that some businesses still need to do more to ensure that they deal with their customers’ complaints effectively and fairly – so that consumers do not then need to escalate their dissatisfaction to the ombudsman,” added Thomas. “We hope that businesses will continue to use this data to focus their attention on addressing these key complaints-handling issues over the coming months and years.”
 

The Bottom Line:If Mr Cable has his way...

"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more

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