The Financial Ombudsman Service (FOS) has just published its annual review of consumer complaints for the financial year 2012/2013, a year in which the FOS was busier than ever.

The FOS reports a 92% increase in new cases that it has taken on in the last year, over 508,000. The sale of payment protection insurance (PPI) accounted for almost three quarters of the complaints dealt with by the FOS, with 2,000 new cases being referred to it each day.

The FOS also takes an opportunity in its annual review to take a side swipe against those who suggest that PPI is a manufactured crisis “bolstered by a raft of bogus complaints made through claims management companies”, citing the uphold rate for PPI complaints made by Claim Management Companies (CMCs) on behalf of customers as proof of the incorrect nature of this allegation.

However, buried away in the Annual Review is a significant criticism by the FOS of the conduct of CMCs: “We also continued to see a number of CMCs behaving unhelpfully. This included some claims managers taking a lax approach to understanding the true nature of their clients’ circumstances”. The FOS also concedes that there is a need for “firmer regulation of [CMCs] at the cowboy end of the industry”. This is of course an opinion that has been expressed rather more forcefully by many in the financial services industry.

The FOS also highlights an 85% increase in disputes over coverage provided by private medical insurance and an 83% increase in complaints about “pay day” loans and lenders (many complaints about payday firms involved them unexpectedly draining struggling borrowers’ accounts of cash).

Finally, the FOS notes that it received 258 complaints from businesses about interest rate hedging products sold by banks in 2012/13. However, the FOS is generally unable to take on cases where a complaining business does not meet the definition of a “microenterprise” in the FCA rules (an enterprise that employs less than ten people and has a turnover or annual balance sheet that doesn’t exceed €2 million) such as to qualify as an “eligible complainant” for the purposes of invoking the FOS’ jurisdiction. Therefore the FOS could not deal with the vast majority of these complaints. Furthermore, the compensation claimed by businesses in these cases significantly exceeds the £150,000 maximum award that the FOS has the power to order by way of compensation to customers, and of course back in January 2013 the FSA rejected the FOS’s suggestion that it should establish a special scheme to deal with interest rate hedging complaints.