24th February 2015
The Financial Ombudsman Service received a total of 161,649 new complaints against companies in the second half of 2014, down 15% from 191,129 in the first half of the year as the tide of new Payment Protection Insurance claims began to tail off.
PPI complaints made up 65% of the Ombudsman’s workload as complaints of mis-selling continue to flood in, however, there has been a 22% drop in the volume of new cases to 104,877 in the second half of the year from 133,819 in the first half.
But the Ombudsman warned that many of the new cases are proving more difficult to resolve as they are increasingly “hard-fought” by banks and credit providers.
For complaints about financial products other than PPI, the total number of cases referred to the ombudsman remained at a similar level throughout the year (57,310 in the first half of the year compared to 56,771 in the second). However, banking complaints increased by 8% and investment cases by 4%.
The average uphold rate (where the ombudsman found in the consumer’s favour) over the six-month period was half (52%), ranging from 4% to 98% across the individual businesses.
The Ombudsman also revealed which businesses received the largest numbers of complaints , however it said that these figures tend to reflect the size of the companies concerned.
Lloyds Banking Group had the highest number of complaints at 46,000, which was down 25% on the first half of the year. Barclays was second with 21,500 cases and third was Royal Bank of Scotland, which includes the NatWest brand, at 13,400.
Chief ombudsman Caroline Wayman said: “PPI complaints still make up the bulk of the ombudsman’s workload and resolving these cases remains a priority. Although it’s good news that complaint numbers are starting to level off, we have seen a change in the nature of the PPI complaints people are asking us to resolve – which are becoming increasingly hard-fought and more complex.
“In areas outside PPI, we continue to see many entrenched disputes that could have been avoided. We’re also hearing dissatisfaction from people where their problems started with a simple misunderstanding. On these occasions, problems could often have been cleared up much earlier,if there had been better communication between the financial business and their customer.
“It will take time to rebuild people’s trust and confidence in the financial sector. And a first step towards this is for all businesses to show they’ve dealt with their customers’ complaints thoughtfully and with care. This is why we share what we see with businesses to help them understand our approach, while at the same time keeping fairness at the heart of what we do. ”
David Mann, head of banking at uSwitch, said: “Although PPI mis-selling has been the biggest scandal to hit the banking sector for several years, it’s a relief to see these complaints finally levelling off.
“Worryingly, banking complaints are rising. Consumers are increasingly dissatisfied with their banking service and are forced to turn to the ombudsman as a last resort because they just aren’t being heard. But despite this rise in complaints, people still aren’t voting with their feet with only 1.6 million people switching in the last year. Many don’t have enough information to tell the difference between services and products and as a result, see no point in switching from one bank to the other.
“It’s clear there is still a long way to go to fully restore trust in banks. With increasing competition from challengers, banks will need to work harder to put customers at the heart of their business and make sure they’re delivering a truly world-class service.”