Consumer complaints have risen by 30% in the last financial year, according to figures from the Financial Ombudsman Service (FOS).
Overall, the FOS dealt with 123,089 new complaints, reversing the decline seen during the previous year.
Many of the disputes were over bank overdraft charges and payment protection insurance (PPI), while half of all complaints were related to just six of the UK’s largest financial institutions.
The number of complaints about current account charges increased ten-fold, reflecting major media coverage of a recent High Court test case.
PPI complaints increased six-fold, with most complaints now relating to how policies are sold, where previously consumers had complained about rejected claims.
The number of mortgage and banking disputes more than tripled, and insurance disputes doubled. However, complaints over mortgage endowments fell by 70%, reflecting the falling number of consumers using these products.
The drop in mortgage endowment complaints had a direct impact on disputes involving IFAs which fell by two thirds to only 4%.
Life insurance and investment product providers also benefited as complaints against them more than halved during the year; again as a result of falling mortgage endowment cases.
During the year, the ombudsman handled a total of 794,648 enquiries and settled 99,699 disputes.
Dr Christopher Kelly, chairman of the FOS, comments: “This time last year we had hoped we were starting to see a downward trend in complaint numbers for the first time. But instead, events during the year have led to the ombudsman service receiving record numbers of new cases.
“The sudden surges in banking and insurance disputes this year have meant that predicting, managing and dealing with complaint volumes has been more of a challenge for us organisationally than ever before.”
The FOS says it is encouraged to see a wide range of consumers using its service, with the number of complaints referred by people aged under 35 increasing two-fold, while the number of women complaining increased by 8%.
“It is also good news to see the diversity of consumers who use the ombudsman service continuing to broaden - reflecting the wide range of financial services and products we cover, from pensions to pet insurance, direct debits to debt collecting,” says Kelly.
“Making our service accessible to everyone is a top priority identified by Lord Hunt in his recent review of the openness and transparency of the ombudsman service.”
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