Last week, Bank of Scotland were fined £3.5 million by the Financial Services Authority (FSA) for poor complaints handling and are required to pay a further £17 million in compensation to the investment customers it misled. So, I thought it would be a good time to give you some information on the Financial Ombudsman Service (FOS) - the independent organisation that settles disputes between consumers and financial companies.
What is the Financial Ombudsman Service?
The Financial Ombudsman Service is an independent body established by Parliament to look at complaints about a wide range of financial matters.
What areas of finance does it cover?
- credit cards and store cards
- loans and credit
- savings and investments
- hire purchase and pawnbroking
- money transfer
- financial advice
- stocks, shares, unit trusts and bonds
How many complaints does it handle?
- In the financial year 2010/11 the ombudsman handled over 1 million front-line enquiries - around 4,000 each working day.
What do consumers complain about most?
- 51% of new complaints in 2010/11 were about the sale of payment protection insurance (PPI). There were 104,597 complaints about PPI - the highest number received in a year about a single financial product.
How many complaints are settled in favour of the consumer?
- 51% of complaints were upheld in favour of the consumer.
Can I complain direct to the Financial Ombudsman Service?
- Consumers must first give the relevant company the opportunity to deal with their complaint. If the company does not provide a satisfactory reply within eight weeks, or the consumer is not happy with the outcome, then they can involve the Financial Ombudsman Service.
Who were the most complaints about?
- You will, probably, not be surprised to know that 65.5% of complaints in 2010/11 were about banks. 10 financial services groups accounted for 73% of new cases, unfortunately there are not named and shamed.
How long will the Financial Ombudsman Service take to investigate a complaint?
- Depending on how complicated a case is, some complaints can be dealt with in just a few months - some can take over a year to resolve.
What if I am unhappy about the Financial Ombudsman's decision?
- If you are not happy with the decision made by the Financial Ombudsman Service you are free to pursue your dispute through the courts.
- The Ombudsman also has an independent assessor appointed by the board to consider complaints from consumers about the level of service provided but not about the decision on any given complaint.
Who complains to the Financial Ombudsman Service?
- 29% of new complaints in 2010/11 were from people living in the South East of England.
- 21% of complaints were received from Daily Mail readers, the Daily Mail was also the newspaper that covered Financial Ombudsman Service most often.
- 26% of complaints in 2010/11 were from retired people.