Financial institutions often fail to deal correctly with customer complaints, according to the Financial Ombudsman Service.
As a result, one in two people who took their complaints to the ombudsman in the year to the end of March were awarded compensation. So, in other words, if you feel you have been treated unfairly, do not let your provider fob you off.
More people are getting this message. According to the ombudsman's annual review of 2012/13, there was a 92% increase in complaints last year, which averaged 7000 per working day.
Natalie Ceeney, the chief ombudsman, is surprised that the financial services industry is not doing more to regain trust by responding to customer complaints more effectively.
She said: "As levels of confidence in financial services have eroded, it is disappointing that we still haven't seen any significant improvement in complaints handling. Too many financial businesses still seem unable to sort out problems themselves, without the ombudsman having to get involved."
The majority of complaints last year (76%) were against banks and many concerned payment protection insurance (PPI), which accounted for 74% of cases dealt with by the Ombudsman Service, more than double the year before. There was also a 34% increase in complaints about current accounts.
Richard Lloyd, Which? executive director, commented: "These shocking figures show the banks are still letting their customers down and failing to help consumers with legitimate claims to get the compensation they're rightly owed."
Building societies have a considerably better complaints record. They accounted for just 4.5% of the ombudsman's cases and their actions were overruled in less than a fifth of cases, whereas with the banks the ombudsman decided they had got it wrong more than half the time.
There was an increase in most types of complaints last year, not just those relating to PPI. Mortgage endowments, previously one of the most complained about financial products, continued to feature with complaints rising 43% compared to the previous year. Problems with pet insurance and payday loans also grew, with the number of complaints about these products increasing by 50% and 83% respectively. There was also an 85% increase in private medical insurance problems, though these made up only 3% of the ombudsman's caseload.
There are plenty of other areas about which the ombudsman receives complaints, including "packaged" bank accounts, which provide unsuitable insurance products, disputed transactions on current accounts or credit cards, and continuous payment authorities, which banks have failed to cancel. The ombudsman has also helped to resolve cases where consumers with mortgages were in financial difficulties, and fielded complaints about motor insurance, and buildings and contents insurance.
Bearing in mind the inability of the banks in particular to deal with consumer complaints, the success of claims management companies in persuading people to let them handle their problems is perhaps not surprising. More than half (57%) of new PPI claims last year were brought by claims management companies, although this was down from 69% the year before.
However, more people are starting to realise they can complain to the ombudsman free of charge and that it is not difficult.
If you want to complain about PPI, you could also visit the Which? website, www.which.co.uk/ppi, where there is a free guide to making a claim. It provides a template letter that you can send, or you can answer questions online and Which? will produce a letter on your behalf and email it to your provider.
Despite the large number of PPI complaints, Ms Ceeney says only 10% of people who were sold PPI have complained. She explains that many people are still unaware that they were sold PPI, which was often attached to loans and credit cards, so it is quite legitimate to ask your bank the question.
If you do want to make a complaint about your bank or any other financial provider, you will need to complain directly to them first to give them the opportunity to put things right. However, you can phone the Financial Ombudsman Service (0800 023 4567) for guidance beforehand.
The advisers staffing the consumer helpline will deal with queries and help resolve problems without the formal involvement of the ombudsman. They can give practical advice on how to pursue your complaint and give you an early indication of its likely outcome, and whether your complaint is worth pursuing. If a provider does not resolve a complaint to your satisfaction within eight weeks you can then ask the Financial Ombudsman Service to take up the matter for you.
Ironically, one type of organisation you cannot complain about to the ombudsman is those claims management companies. They are currently the responsibility of the claims management regulator, although at some time in the next 12 months the role will be taken over by the Legal Ombudsman.
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