MSE News: Huge increase in Financial Ombudsman complaints

Former_MSE_Dan

This is the discussion thread for the following MSE News Story:

"Complaints to the independent FinancialOmbudsman Service were up by 18% during the second half of last year, after many banks and other firms wrongly rejected consumer gripes."

Read the full story:
Huge increase in Financial Ombudsman complaints

A_fiend_for_life

If they are knowingly turning people away after legitimate complaints there should be a penalty or heavier penalty if one doesn't exist.

Any mention of fines for Ocean Finance? They sound a horrendous company to deal with.

glider3560

What we need to remember when discussing these figures is that the bank with the most customers is probably most likely to attract the most complaints. Perhaps the figures would be better given as complaints per customer - this would then allow us to see the results more fairly?

Premier_2

I thought the financial institutions were charged for each (proper) complaint the ombudsman received against them? £400 it was being reported?

It wouldn't make financial sense for a financial organisation to reject cases even when they know they are in the wrong unless the tactic of such refusal does stop the claim. Otherwise the financial institution will incur an additional £400 cost in excess of what they already owe.

Each rejection letter from a financial institution invites the customer to take the matter to the FOS if they are not satisfied. The fact that the number of claims to the FOS has increased suggests that is indeed what is happening.

However, the drop in the percentage of cases the FOS is eventually finding in favour of the customer suggests that people are just forwarding more claims to the FOS when the financial institution refuses them ... probably because it doesn't cost the customer any money to do so, even in the cases when the FOS eventually agrees with the financial institution's decision.

oakhouse13

For every case that the FOS takes it is paid a statutory levy of £500 by the company that the complaint is made against. Companes can have 3 complaints handled by the FOS for no charge after which the levy kicks in.

I can almost see a market developing where financial companies, consumers and the FOS all compete to come out on top with consumers confident of their case knowing the company will pay £500 extra if it goes through the FOS and the FOS expanding rapidly the more complaints it takes the more it is paid.

Why can't financial service companies manage relations with customers better direct?

fair_enough

It doesnt seem right that this many complaints are ruled in the customers favour once the FOS get involved - there should certainly be tougher rules in place to prevent this sort of behaviour from the banks and other finanical institutions.I was also quite surprised how many there were as i personally have had a complaint rejected by the FOS and i know of 2 others that have also. All 3 were 3 very different complaint types.I wonder how many of these stats are made up of PPI and fee claims/complaints.