The FOS has published its 2014/15 annual review, setting out a plethora of fascinating statistics about the service.
Overall the volume of new complaints referred to the FOS fell significantly from 512,167 the previous year to 329,509. This was largely driven by PPI complaints which halved from record highs the previous year. However, PPI complaints still made up two thirds(!) of the FOS' workload this year and PPI looks to continue to dominate FOS complaints for some time yet. The FOS this year resolved 57% of complaints within 12 months (down from 78% the previous year), but that figure rises to 90% of complaints when PPI complaints are excluded, demonstrating the PPI backlog that still exists.
In contrast complaints relating to consumer credit increased markedly, particularly complaints about payday lenders, credit broking and debt collection, perhaps reflecting the increasing proportion of society dependent on credit to make ends meet and publicity surrounding the FCA now regulating consumer credit. There was also a huge spike in complaints about "packaged" current accounts, a product that is the subject of an on-going FCA review.
As in previous years investments and pensions continue to make up just a small proportion of overall complaints, representing only 4% of new complaints received by the FOS this year. It is interesting to see that this category is still dominated by mortgage endowment complaints, which continue to decline year on year but still made up 17.5% of complaints within the investments and pensions category. The FOS also continues to receive a significant number of complaints in relation to UCIS.
Within the pension and investments category a surprisingly small number of complaints relate to IFAs, just 13% in relation to investment products and 20% in relation to pensions, suggesting that customers are more likely to pursue complaints against their product providers than against their advisers. 39% of complaints against IFAs are upheld by the FOS, which is in line with the FOS average (excluding PPI complaints).
The review notes that pension complaints are among the hardest fought disputes that the FOS sees. There was a significant increase this year in complaints concerning annuities, which was probably prompted by press coverage of the recent 'pension freedom' reforms highlighting that annuities can often represent poor value for customers. There was also a modest increase in complaints concerning income drawdown, and it will be interesting to see how this statistic changes next year, again following the impact of the pension freedom reforms.
Pensions and investments remain by far the complaints that are most likely to be referred to an Ombudsman, representing the relatively complex and high-value nature of these complaints and the fact that the FOS' decision is more likely to impact on the complainant's overall financial security than with other categories of complaint. 27% of investment complaints and 26% of pensions complaints resulted in an ombudsman final determination, compared for example with just 6% of PPI complaints and 14% of banking complaints.
In terms of firms' performance, it is encouraging to note that the review shows that businesses are getting better at responding to customers' complaints quickly. In 2011 40% of FOS complainants had not received a response from the firm complained to within eight weeks. This figure has fallen each year since, and now stands at just 11%.
The review also set out numerous statistics that were arguably less headline grabbing but still very interesting. For example, did you know:
- That the same proportion of FOS complainants (2%) read the Financial Times as read the Daily Star?
- That people in Wales (82%) are more likely to be aware of the FOS than people in Northern Ireland (66%), Scotland (71%) or England (74%)?
- That the FOS received most calls from customers in Bolton, Manchester and Birmingham?
And finally, if you're not sitting in an open plan office and fancy seeing some of the key stats from the review set to the background of a jaunty tune, the FOS has you covered.