Four-year wait to have some financial complaints dealt with by ombudsman

Some people complaining about financial firms to the ombudsman have had a four-year wait, a committee of MPs has heard.

Representatives from the Financial Ombudsman Service (FOS) were asked by the Treasury Committee about the oldest complaints in its backlog of cases.

Nausicaa Delfas, interim chief executive and chief ombudsman at FOS, said: “When I joined (in 2021) one of my first impressions was that many people have had to wait far too long for cases.

“And some cases were even up to four years old.

“What I’m pleased to say though is that we made a commitment this year to have no cases older than 18 months old by the end of this financial year – unless there was a reason beyond our control to prevent that.”

Asked if the service was on track to achieve that, she replied: “Yes, we are, we’re on track to achieve that.

“There were a significant number at the beginning of the year, now we expect that there may only be a handful at the end of this financial year that we wouldn’t be able to resolve.

“But we’ve made significant inroads into that.”

Asked how big the backlog is now, she said: “When I joined in May 2021 it was 90,000 unallocated cases.

“I’m pleased to say that we’ve over halved that already. We’re now at 43,000.”

She said innovations to drive resolutions faster seemed to be working.

Ms Delfas added: “We’re going to continue on that path, it’s one of our top priorities to get through that backlog so that we can get into a steady state.”

She said the service is dealing with the oldest cases first, adding: “We are doing some simple cases at the front end as well.

“But currently if someone came to us today it would take probably on average seven months for their case to be resolved.

“But we expect with the changes we’re making we’ll be able to have an average of four months.”

The committee heard the ombudsman service had received many coronavirus pandemic-related complaints such as those concerning wedding insurance, travel insurance and health insurance.

Ms Delfas said: “We also got a lot of high-cost credit cases, unaffordable lending and guarantor loans. They were a high proportion of the increase in cases that came in.

“And I think when we look forward to the coming year, whenever there is a period of economic or financial hardship, it wouldn’t be surprising if we got more of those cases again.”

Ms Delfas also said: “We’ve seen a 60% increase in fraud and scam complaints at the Financial Ombudsman Service between this year and last year.

“And there are a lot around authorised push payment fraud, for example.

“What we’ve seen there actually is that through the feedback we’ve given to firms as we’ve been handling these complaints, we’ve seen a marked improvement in the quality of the risk warnings that are given to customers, that they’re more focused and specific to the types of frauds that might be occurring.

“And whilst the uphold rate is still quite high in that area it is slowly coming down.”