Complaints made to the FOS have increased sharply.
More consumers are choosing to complain about their poor treatment by financial institutions to an independent body that settles disagreements on their behalf.
The Financial Ombudsman Service (FOS) investigated complaints from over 200,000 consumers last year about banks, investment companies and insurance firms.
The figures in the FOS’s annual report highlight that a record number of disputes were made to the independent body, which is responsible for settling monetary grievances between consumers and businesses.
About 4,000 inquiries a day were received by the service, equating to about 1 million over the course of the whole year.
The largest area of complaint, that accounted for almost half of the cases recorded, centred around payment protection insurance (PPI). A total of 104,597 complaints were raised against PPI, which is double last year’s figures and the highest ever received about a single financial product in 12 month period.
Sarah Brooks, Head of Financial Services at Consumer Focus, said: “The Ombudsman is to be commended for helping with so many consumers’ complaints this year. The banks’ battle to dodge its PPI responsibilities has damaged the industry’s reputation, tied up the Ombudsman’s resources and worst of all left consumers out of pocket and out of patience. We now urge banks to deal promptly with these complaints so consumers are not forced to continuing taking their complaints to the Ombudsman so a line can be drawn under the whole sorry affair”.
She added: “Over half of complaints the Ombudsman deals with get financial compensation proving that persistence pays in the end. If people think their bank has treated them unfairly, they should always consider taking their case to the Ombudsman for an independent review”.
Complaints about travel insurance, car insurance and mobile phone insurance also increased.
A spokeswoman for the FOS said: “In most cases the cause of complaint is the customers have had a claim that they thought was legitimate turned down. In many cases insurers should have investigated before concluding that there was not a valid claim. They are sometimes penalising consumers when it is not their fault”.