annual review 2006/07
1 April 2006 to 31 March 2007
who the complaints were about
- financial services firms complained about by sector
- financial products most frequently complained about by sector
- how often do financial services firms have complaints about them referred to the ombudsman?
- how do financial services firms rate the service we provide?
The charts below show how the new complaints we received during the financial year 2006/07 were spread across the different sectors of the financial services industry.
Disputes involving life insurance and investment product-providers fell by 8% compared with the previous year – reflecting the decrease in complaints about mortgage endowments sold by larger insurance companies.
On the other hand, disputes about banks and general insurers both rose by 4% on the previous year – largely as a result of increases in the numbers of complaints about issues such as bank charges, motor insurance and loan protection policies.
While the overall proportion of disputes involving independent financial advisers (IFAs) fell slightly by 2%, the proportion of mortgage endowment complaints against IFAs rose by 4% during the year – following a 14% increase in the previous year. Mortgage endowment complaints involving banks and insurers fell by 18% and 6% respectively.
| life insurance and investment product providers – what products were complained about | % |
|---|---|
| mortgage endowments | 71 |
| other investments | 15 |
| personal pensions | 8 |
| insurance products | 6 |
| banks – what products were complained about | % |
|---|---|
| mortgage endowments | 31 |
| banking services and products | 59 |
| other investments | 4 |
| insurance products | 4 |
| pensions and securities | 2 |
| independent financial advisers (IFAs) – what products were complained about | % |
|---|---|
| mortgage endowments | 83 |
| other investments | 8 |
| pensions | 5 |
| securities | 2 |
| other | 2 |
financial products most frequently complained about by sector
These charts show how cases involving the products most frequently complained about to the ombudsman service were spread across the different sectors of the financial services industry.
| complaints about mortgage endowments | % |
|---|---|
| life insurance and investment product providers | 54 |
| banks | 19 |
| independent financial advisers (IFAs) | 21 |
| building societies | 4 |
| other | 2 |
| complaints about personal pension products | % |
|---|---|
| life insurance and investment product providers | 72 |
| independent financial advisers (IFAs) | 16 |
| banks | 8 |
| other (including building societies and stockbrokers) | 4 |
| complaints about other investment products | % |
|---|---|
| life insurance and investment product providers | 63 |
| banks | 17 |
| independent financial advisers (IFAs) | 12 |
| building societies | 3 |
| other (including stockbrokers and fund managers) | 5 |
| complaints about banking products and services | % |
|---|---|
| banks | 85 |
| building societies | 7 |
| mortgage brokers | 5 |
| other | 3 |
| complaints about general insurance products | % |
|---|---|
| general insurers | 66 |
| life insurance and investment product providers | 13 |
| insurance brokers | 9 |
| banks | 7 |
| cash-plan health insurers | 2 |
| Society of Lloyd's | 1 |
| other | 2 |
how often do financial services firms have complaints about them referred to the ombudsman?
The chart below shows that eight out of ten businesses covered by the Financial Ombudsman Service had no complaints about them referred to us during the financial year 2006/07.
2,637 businesses – 11.5% of all firms we cover – had just one or two complaints referred to us in the year. As in previous years, we again did not charge businesses case fees for the first two complaints during the year. This meant that only around 6.5% of firms covered by the ombudsman service paid case fees in 2006/07.
- 18,754 businesses (82% of all businesses covered by the ombudsman service) had no complaint referred to the ombudsman during the year
- 1,942 businesses (8.5% of all businesses we cover) each had 1 complaint referred to the ombudsman during the year
- 695 businesses (3% of all businesses we cover) each had 2 complaints to the ombudsman
- 302 businesses (1.3% of all businesses) each had 3 complaints to the ombudsman
- 670 businesses (3% of all businesses) each had between 4 and 10 complaints to the ombudsman
- 164 businesses (0.7% of all businesses) each had between 11 and 20 complaints to the ombudsman
- 136 businesses (0.6% of all businesses) each had between 21 and 50 complaints to the ombudsman
- 62 businesses (0.3% of all businesses) each had between 51 and 100 complaints to the ombudsman
- 36 businesses (0.2% of all businesses) each had between 101 and 250 complaints to the ombudsman
- 22 businesses (0.1% of all businesses) each had between 251 and 500 complaints to the ombudsman
- 40 businesses (0.2% of all businesses) each had more than 500 complaints referred to the ombudsman during the year
22,823 businesses were covered by the Financial Ombudsman Service as at 31 March 2007
Ten of the UK’s largest financial services groups accounted for half of the total number of complaints we received during the year. At the other end of the scale, 225 cases (0.2% of all complaints) related to friendly societies and just six complaints involved credit unions.
how do financial services firms rate the service we provide?
We continue to carry out research to gauge the views of the businesses we deal with – on how we handle disputes and the extent to which we accommodate their particular needs and concerns. During the year we launched a series of quarterly surveys to measure how businesses rate the service we provide.
These surveys cover all sectors of the financial services industry, ranging from sole-proprietor businesses to the largest financial groups. The results of these surveys help us measure our service against a number of “satisfaction indicators”. These are benchmarks that reflect what businesses tell us they expect from our service and our own organisational aims and values.
| how do financial services firms rate the service we provide? | % who agree | % who express no view | % who disagree |
|---|---|---|---|
| our role is essential for confidence in financial services | 50 | 23 | 27 |
| our service is good value for businesses who pay the levy/case fees that fund us | 35 | 36 | 29 |
| our decisions on cases are fair and unbiased | 58 | 24 | 18 |
| our decisions are consistent | 36 | 23 | 41 |
| we provide a good dispute-resolution service for businesses | 62 | 23 | 15 |
Our surveys of the businesses we cover show that smaller firms – those with fewer complaints referred to the ombudsman service – generally report lower levels of satisfaction than larger firms. This is especially the case where we measure how businesses rate the consistency of our decisions. It appears that smaller businesses, who have only a few cases with the ombudsman service, are more likely to say we are inconsistent than larger businesses, who see a much wider range of our decisions.
During the year we therefore carried out a range of focused research, aimed at getting a better understanding of the views of smaller businesses, many of which have little or no direct contact with us. The way in which smaller businesses view – and are affected by – our decisions and our decision-making process has been a key issue for consideration by our smaller firms' taskforce this year.