MSE News: PPI dominates Financial Ombudsman Service complaints

Former_MSE_Helen

"Of the record 264,375 formal disputes lodged in the last financial year, 60% were about PPI..."

Read the full story:
PPI dominates Financial Ombudsman Service complaints

dunstonh

The number of investment complaints was down 4%, but pensions were up by 28%.

Pension complaints increased mainly due to people taking out alternative options to annuity (the guaranteed income option) and going with potentially higher rewarding but also higher risk options. Due to a legislative change and low interest rates leading to low gilt yields, some of these have found the risk hasn't paid off.

IFA complaints fell again to just 2643 and only represent 1% of all FOS complaints. So, there is good news in there.

~Brock~

I hear that approx 6000 complaints of the PPI complaints were from customers who never even that the product in the first place, mainly driven by CMC's, who as usual get away scott free from the costs and time that they waste.

Reaper

Also worth mentioning that 6,000 of those PPI claims were completely bogus.
http://www.bbc.co.uk/news/business-18145963

That's the problem with a system where companies and individuals can make a claim for free. Maybe a deposit is needed - the cheque would only be cashed for time wasters. That might slow the PPI companies down and stop them passing any old claim on, or telling people they are owed money when they are not.

dunstonh

~Brock~ wrote: »

I hear that approx 6000 complaints of the PPI complaints were from customers who never even that the product in the first place, mainly driven by CMC's, who as usual get away scott free from the costs and time that they waste.

That 6000 is where they were still referred to the FOS. It doesnt inlcude those that the banks or other firms rejected but not taken to the FOS.

One of the banks reported that as many as half the PPI complaints it gets from claims companies do not have PPI. There is no excuse for the 6000 getting referred to the FOS though.

6000 complaints to the FOS costing the firms £850 each results in a bill of £5,100,000 passed back to the consumer in retail charges. Claims company suffers not penalty.

jamesd

dunstonh wrote: »

Pension complaints increased mainly due to people taking out alternative options to annuity

That is not the main reason for the increase in pension complaints, it's an insignificant factor involving just 2.7% of pension complaints. The real pension complaint numbers* are:

personal pensions from 1,407 to 1,827
SIPP and SSAS from 472 to 562
annuities from 423 to 511
SERPS from 196 to 294
income drawdown from 66 to 94
FSAVC from 65 to 76

An increase of over 400 in personal pension complaints is of hugely greater significance to the pension workload than an increase of just 28 claims about income drawdown.

*from page 43 of the FOS annual review 2012

dunstonh

I believe that just refers to income drawdown plans. Not drawdown completed on personal pensions and SIPPs.

jamesd

After reading your reply I telephoned the FOS to get a definitive answer. The call was routed to Jim in the complaints section who did some checking and informed me that drawdown questions would not be included in the personal pension or other sections but were all consolidated into the number on the income drawdown row.

magpiecottage

The SERPS one is interesting. Up by roughly a third despite the FSA doing work on it some years ago and concluding that 99% of consumers would have chosen to contract out if they were properly advised (regardless of whether they were or not).

dunstonh

magpiecottage wrote: »

The SERPS one is interesting. Up by roughly a third despite the FSA doing work on it some years ago and concluding that 99% of consumers would have chosen to contract out if they were properly advised (regardless of whether they were or not).

We can bet where most of those are generated...

magpiecottage

dunstonh wrote: »

We can bet where most of those are generated...

I had one case last year where a the director of the firm I believe you refer to wrote to one of my clients claiming the complaint "was and always has been zero risk". He is also the director of a member of your network and I found had the previous month moved pension to a different provider and put the complainant into some quite speculative funds.

I have reported the matter to both the FSA and the MOJ.