FOS reports complaints continue to rise
Most of us use at least one financial service, and many of us have had reason to complain at one time or another. New statistics indicate that the number of complaints to financial services companies continues to increase year on year.
Figures published today (14/06/23) by the Financial Ombudsman Service (FOS) show an increase in complaints received. The statistics show 164,560 complaints in 2021/22 versus 165,149 during April 2022 to March 2023.
Complaints about current accounts were up 7%, building insurance 27% and those about motor hire purchase increased by 87%.
FOS reports
“The top five most complained about products, with the uphold rate in brackets
| 2022/23 | 2021/22 | |
| Current accounts | 26,039 (40%) | 24,335 (51%) |
| Credit cards | 14,504 (34%) | 14,584 (37%) |
| Car/motorcycle insurance | 11,851 (30%) | 9,310 (28%) |
| Hire purchase (motor) | 11,446 (38%) | 6,128 (45%) |
| Buildings insurance | 6,497 (33%) | 5,101 (33%) |
“
The FOS said that fraud and scams made up over half of the complaints and more than a third were about administration/customer service.
Customer service and satisfaction generally is at an all-time low:
We saw that during the last reported quarter 1 July – 31 December 2022 the FOS received a total of 79,921 new complaints, compared to 72,978 in the previous six months.
Hopefully the Financial Conduct Authority’s (FCA) Consumer Duty, which comes into force in July 2023, will ensure businesses do more to deal with complaints.”
From 1 July 2023 the Consumer Duty will require financial companies to act to deliver four “good” outcomes for customers. There will be four rules relating to the outcomes expected by the Financial Conduct Authority (FCA).
The outcomes relate to:
- products and services
- price and value
- consumer understanding
- consumer support
The FOS said that it had seen a 27% rise in car/motorcycle insurance complaints and advised that this was “largely due to insurers delaying paying out on claims”.
Tim Kelly, an insurance expert from MotorClaim Guru is not surprised by the rise, commenting:
“Due to the increase in values of vehicles in the secondhand market, there is a disparity in values obtained from the guides that Insurers use, and the actual cost of replacing these vehicles in the market place.”
He would like see a further rise in the “upholding” (acceptance) of complaints, stating that:
“Both Insurers and the FOS stick to a process, rather than referring to examples in the marketplace. As a result, consumers are being mistreated and experiencing financial detriment.”
Businesses need to invest more in customer service and in informing consumers of their legal rights. I urge people who have been scammed to use the FOS if they don’t get satisfaction from their bank.
Only the biggest banking groups have so far signed up to The Contingent Reimbursement Model (CRM) Code. This has been in place since May 2019 and covers authorised push payment (APP) fraud. APP is where a victim sends money to a scammer by paying a fake invoice or bill, for example.
The FOS takes the CRM into account when assessing complaints (against those firms which have signed up to it) but it’s not the only factor.
A spokesperson for the FOS said:
“We receive complaints against firms that are signatories to the Code as well as those that aren’t. Our uphold rate for cases that involve the CRM is around two thirds. We continue to look at the individual circumstances of each complaint. The CRM isn’t mandatory reimbursement for consumers (there are exceptions in the Code).”
Although in a slight contradiction they also said ““Over half of our current account complaints involve fraud and scams where the uphold rate here has decreased from 65% to 45%. This has impacted our overall uphold rate for current accounts. Our uphold rate for fraud and scams has decreased, in part, because we are now seeing fewer cases that involve the Contingent Reimbursement Model. Consumers whose cases aren’t impacted by the CRM have less recourse for reimbursement.”
Two thirds of complaints about fraud and scams are being upheld. This is far higher than the other complaints that the FOS receives, so I encourage anyone who has been a victim of being scammed to take it up with their bank and, if not satisfied, take the matter to the FOS!
Further help with complaining for consumers
How to complain about financial institutions various posts to help with a number of financial problems
Top 20 Tips How to complain effectively
If you need more help, information and tips with how to quote Acts, template letters and advice on how to complain effectively don’t forget the GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!
101 Habits of an Effective Complainer provides you with more tips
Purchase and download Templates for complaining to financial institutions
Purchase and download templates to gain redress swiftly
Tim Kelly
Tim Kelly MotorClaimGuru insurance expert interviewed on The Complaining Cow Consumer Show
What you need to know about vehicle insurance guest post by Tim Kelly
