Banking and insurance gripes pushing up financial complaints figures – ombudsman

A substantial rise in banking and credit complaints has partly driven an increase in gripes being taken to the ombudsman.

The Financial Ombudsman Service (FOS), which released complaints figures for the first half of 2023, also highlighted building and motor insurance complaints, which recently hit a five-year high. It said this was in part due to insurers delaying in paying out on claims.

Mortgage and home finance complaints also edged up in the first half of this year, compared with the last six months of 2022.

Customers of financial firms can take their complaint to the ombudsman service when they cannot reach an agreement with the firm.

Overall, 93,114 complaints were received by the FOS between January 1 and June 30 2023, increasing from 79,921 complaints in the last six months of 2022.

The service said that banking and credit complaints have risen substantially, with fraud and scam cases making up around half of that increase.

The FOS received 56,690 new banking and credit complaints in the first half of 2023, up from 50,346 in the second half of 2022.

The most complained-about products seen by the ombudsman in the banking and credit sector included current accounts, credit cards, personal loans, and business current accounts.

While some banking and credit complaints related to fraud and scams, others included gripes about administration and customer service and complaints about irresponsible or unaffordable lending.

The FOS also received 24,496 new general insurance/pure protection complaints in the first half of this year, compared with 19,346 in the second half of 2022.

There were also 5,002 new mortgages and home finance complaints the first half of 2023, compared with 4,160 in the second half of 2022; and 4,189 new decumulation life and pension complaints in the first half of 2023, increasing from 3,842 in the second half of 2022.

The FOS also recorded 2,593 new complaints about investments in the first half of this year, compared with 2,227 in the second half of 2022.

Abby Thomas, chief executive and chief ombudsman at the FOS, said: “Financial complaints have risen again, with cases particularly increasing in the banking and insurance sectors.

“Given the economic challenges people are facing, it’s more important than ever that they feel protected. Whatever their grievance, consumers should expect fair and reasonable treatment from their provider.

“If consumers don’t feel that’s the case, they can ask our free, independent service to investigate their complaint.”

In the first six months of this year, the FOS upheld 37% of complaints in the consumers’ favour, compared with 34% in the second half of 2022.

A spokesperson for the Association of British Insurers (ABI) said: “We’re concerned to see these latest complaints figures from the Financial Ombudsman Service. Insurers work hard to process claims as quickly and efficiently as possible whilst managing challenges beyond their control that can impact on timings, such as delays to car repairs.

“However, clear and timely communication is vital to support the customer throughout any claim. We’ll work with our members and the FOS to understand where improvements can be made, in particular any learnings from the complaints that have been upheld.”

A spokesperson for trade association UK Finance said: “The financial services industry is committed to providing quality customer service and working to ensure customers are supported during the ongoing cost-of-living challenges.

“And when things do go wrong, firms are resolutely committed to putting them right as quickly as possible, and most issues are resolved with a customer directly. Where customers aren’t satisfied, they can complain to the Financial Ombudsman Service, who will independently look into the case and reach a decision.”

Rocio Concha, Which? director of policy and advocacy, said: “It is very concerning to see the ombudsman dealing with such a significant increase in complaints – especially at a time when consumers are battling the worst cost-of-living crisis in decades.”

She added: “A significant increase in the number of complaints made about fraud is troubling and this process can exacerbate the already traumatic experience of being scammed for victims.”