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MSE News: Financial complaints up 15%

edited 30 November -1 at 1:00AM in Reclaim PPI & Other Insurance
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MSE_GuyMSE_Guy MSE Staff
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edited 30 November -1 at 1:00AM in Reclaim PPI & Other Insurance
This is the discussion thread for the following MSE News Story:

"Complaints against firms to the independent arbitrator jumped by 15% during the final six months of 2010 ..."
Read the full story:
Financial complaints up 15%



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  • At the Treasury Select Committee hearing into financial regulation, the FOS said that its service was used in the sales process as a call to action to reassure customers at the point of sale. This worried me as if a secondary market develops in products that rely on a complaints procedure to be sold and then a claims management industry develops to take these complaints, the market is rewarding intermediaries and becomes less efficient, possibly.

    Can you report on this too, please, as well as itemising the stats.
  • dunstonhdunstonh Forumite
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    Figures from the Financial Ombudsman Service out today show it received 97,237 new complaints – an increase of 15% on the 84,212 cases received in the first half of 2010.

    <snip>

    Complaints about mis-sold payment protection insurance (PPI) complaints has continued to increase – they now account for over half of all new cases.

    So, one product type is totally distorting the claims stats.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LokoloLokolo Forumite
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    I like the way HSBC have the 4th highest number of complaints. Yet only 27% are in favour of consumer!

    Silly consumers complaining when they shouldn't be.
  • dunstonhdunstonh Forumite
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    Lokolo wrote: »
    I like the way HSBC have the 4th highest number of complaints. Yet only 27% are in favour of consumer!

    Silly consumers complaining when they shouldn't be.

    Complaints handlers are saying that they are getting as much as a 1/3rd of complaints about products not even held by the the consumer. Typically complaints firms generating bogus complaints where they get paid £x up front to get a refund from a PPI product that was never taken out in the first place. The claims company make money when there is no complaint to answer.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ~Brock~~Brock~ Forumite
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    dunstonh wrote: »
    Complaints handlers are saying that they are getting as much as a 1/3rd of complaints about products not even held by the the consumer. Typically complaints firms generating bogus complaints where they get paid £x up front to get a refund from a PPI product that was never taken out in the first place. The claims company make money when there is no complaint to answer.

    The fraudulent element of making a false claim, especially (and obviously) where the product being complained about wasn't even sold, needs to be stamped out now, and quickly.

    Claims firms seem to be able to make these claims with no fear of reprisal despite the fact that there is clearly a link to potentially fraudulent activity. Unfortunately a weak regulator appears to be powerless (or unwilling) to deal with it, and the FOS are unable to see the wood from the trees.

    Check out the following:

    Fraud Act 2006 (Section 2)

    The Tort of Deceipt

    Whilst this activity carries on unchecked - and the eveidence is clear that it is widespread - then genuine complaints will continue to be delayed due to being buried amongst the sheer numbers of fraudulent complaints. Also, costs to consumers in general will rise from those firms affected by this widespread deception.

    Sites like this also have a part to play by not encouraging the types of 'have a go' complaints that are based not upon any genuine cause but moreover because there appears to be an easy bandwagon to jump upon.
  • Lokolo wrote: »
    I like the way HSBC have the 4th highest number of complaints. Yet only 27% are in favour of consumer!

    Silly consumers complaining when they shouldn't be.

    Place i used to be the complaints manager for had only 6% of cases found in favour of the consumer - so thats a whopping 94% of cases where the FOS actually agreed with me! :D
    We've spent decades teaching people about their rights, but nothing about their responsibilities.
  • dunstonhdunstonh Forumite
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    Reading the complaints data, there are some interesting figures. Some are below along with some anecdotal comments for good measure ;)

    1 - of those that complained, Daily Mail / Mail on Sunday readers accounted for 21%. Nearly double the next at 11%. - in financial services you are warned to be careful with Mail readers and not to be fooled by their know-it-all attitude as usually they don't know anything other than how to complain.

    2 - The FOS asked how people heard about the FOS. The "heard from claims company" was not listed and "other" only accounted for 6%. Yet given the vast number of PPI complaints that are generated by claims companies and that they account for over 50% of complaints, that doesnt seem right.

    3 - complaints from the C1/C2 skilled and semi-skilled individuals have been increasing every year. They accounted for 57% in 2010 compared to 36% in 2007. A direct reversal to the AB professional stats. Most complaints from C1/C2 individuals were about savings/investment products. Again, that fits in with the perception that inexperienced and lower knowledge consumers are riskier to deal with as an adviser and reflects the compliance position that many advisers take now in dumbing down advice so its no longer best advice given but best advice based on your ability to understand.

    4 - 33% of complaints came from skilled trades (eg electricians, plumbers, mechanics). <Generalisation alert> My experience is that these are often the type of individuals that switch off when being told risk warnings or pros/cons or they leave the room and let the wife listen when she really wants to watch Coronation Street. They are usually the ones that don't bother reading the documents you prepare and want to go straight to signature as they havent got time to talk with you. Maybe that is why they have more complaints as they didnt take an interest or try to understand at the start? That said, the self employed only account for 13% of complaints overall and the self employed, being business people, tend to understand things like risk vs reward better as they have to deal with it within their own business.

    5 - complaints about investment products - IFAs by far do more investment products than banks and tied agents. Yet banks account for 29% and insurers and their reps account for 45% of complaints. IFAs account for just 12%. In the investment section of this forum, all the regular posters will tell you never to get investment advice from a bank or tied insurance agent. Now you see why.

    6 - pension complaints have tied agents accountable for 48% and banks 10%. IFAs have 28%. However, before it makes it look like the banks are better, it needs to be noted that over 75% of pension advice transactions are done by IFAs. Banks and tied agents account for under 20% of the transactions.

    What I found interesting is that the compliance warnings issued to advisers largely reflects the complaint stats and who is involved or where the issues are. The dumbing down of investment advice to low knowledge consumers being a key one that has been happening since 2007. These stats are analysed and firms do take notice. However, the outcome is not always the best. It can be a case of protecting your backside being a priority rather than doing what is best.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • JuicyJesusJuicyJesus Forumite
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    dunstonh wrote: »
    Maybe that is why they have more complaints as they didnt take an interest or try to understand at the start?

    Entirely true, and sadly true of a lot of society. Don't bother to read what you're signing, don't bother to think about the commitment you're making, just enjoy the benefits and scream bloody murder when it goes wrong.
    urs sinserly,
    ~~joosy jeezus~~
  • JuicyJesus wrote: »
    Entirely true, and sadly true of a lot of society. Don't bother to read what you're signing, don't bother to think about the commitment you're making, just enjoy the benefits and scream bloody murder when it goes wrong.

    hear hear

    CS2
    We've spent decades teaching people about their rights, but nothing about their responsibilities.
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