Complaints to ombudsman about finance bodies up 27%
Banks performed worse than insurance or investment sectors with 10% more claims
Financial Services Ombudsman Bill Prasifka said that the rise in complaints was down to several factors, including an increase in the number of people who are in financial distress. Photograph: Cyril Byrne
The volume of consumer complaints the Financial Services Ombudsman received jumped by 27 per cent in the first half of the year, as financial institutions were criticised for failing to learn from previous complaints.
Banks were singled-out for performing worse, with approximately 10 per cent more complaints upheld against banks than their peers in the insurance and investment sectors.
According to the ombudsman’s bi-annual review for the first six months of the year, more than 4,600 complaints were made, up from 3,668 in the same period in 2012. Of these, 21 per cent were settled between the consumers and the financial institutions, without the need for a full adjudication by the ombudsman. Three quarters of complaints that were investigated by the Ombudsman were not upheld, with 16 per cent partly upheld, and just 8 per cent fully upheld, down from 9 per cent in the same period last year.
Ombudsman Bill Prasifka said that the rise in complaints was down to several factors, including an increase in the number of people who are in financial distress, which means people are considering their financial products more carefully.
He also pointed to a “paradigm shift”, which means that where once, bank managers and their equivalent were treated with “awe and respect”, this is now largely gone.
“People are more willing to make complaints,” he said, adding that less than 1 per cent of all complaints made were of a “frivolous” nature.
Mr Prasifka also bemoaned the fact that the same issues and complaint types recur each year. “The review suggests that some financial institutions have not sought to learn from previous complaint experiences and findings issued,” he said. “The model we would like to see the industry going towards, is that if there is a problem, they identify it and address it with their customers – there shouldn’t be a reason for so many complaints to come to us,” he added.
Half of all complaints received related to the insurance sector, which were up by 23 per cent on the previous year at 2,318.
Payment Protection Insurance was a key driver behind the rise in insurance complaints, with most of these concerning alleged misselling of the product to consumers.
Banking accounted for 36 per cent of complaints, with mortgages and bank accounts the most common causes of concern.
Mortgage complaints jumped by 51 per cent, with a “significant portion” of these complaints related to the repayment terms offered by banks after the mortgages arrears resolution process has been completed.
The ombudsman also reported a 36 per cent increase in investment complaints, with misselling and misrepresentation the primary reason for making a complaint.