The Financial Ombudsman Service ("FOS") has published its annual review for 2013/14, containing key trends and figures regarding consumer concerns relating to financial products and services.


The FOS was set up by the Financial Services and Markets Act 2000to tackle individual disputes between consumers and financial services providers.  The FOS does not have regulatory enforcement powers. It aims to resolve consumer complaints and works alongside financial services firms to avoid similar problems arising in the future.

Analysis of key trends

The annual review shows there has been a significant rise in the number of consumer cases which the FOS is now expected to handle. In 2013-14, the FOS dealt with approximately 2.35 million enquiries and complaints.  This is a considerable increase on previous years and demonstrates heightened consumer awareness in the financial services sector.  The FOS has doubled the number of adjudicators employed to handle cases in the past two years in order to meet this significant demand.

Figures of particular note are:

  • Only one in five of initial enquiries received turns into a formal dispute.
  • Complaints to the FOS in relation to credit cards and unsecured loans have fallen by 47% and 19% respectively.
  • Cases involving investment and insurance queries have remained at broadly the same level for the past two years.
  • 36% of enquiries raised in relation to banking and credit involved issues with administration processes.
  • PPI related enquiries have risen by 6% in the last year to form 78% of cases raised, although commentary in the annual review suggests the tide is turning in respect of the volume of new PPI complaints received.

Other themes

The FOS Chairman's Foreword describes the growing strength in the relationship between the FOS and the Financial Conduct Authority ("FCA") which can be used to horizon spot and communicate new trends which the FCA may wish to investigate.  For example, enquiries to FOS from consumers regarding packaged bank accounts have more than tripled in the past year, and over a thousand complaints were received on card protection insurance policies.

Better communication between the FOS and firms is also a theme throughout the review, including discussion on how firms can align their complaint handling approach to that of the FOS.  For example, an encouraging improvement described in the report relates to how banks are dealing with complaints on packaged bank accounts to make resolution more likely without FOS involvement.  The report concludes that a more joined-up approach can also assist with cases involving consumer financial difficulty, which may require a mediated settlement between all parties (including the FOS) for the case to be closed.

Predicted future trends in areas of concern for consumers include the use of new technology in financial transactions (for example, Bitcoin and Facetime), how large scale IT failures can be dealt with in a more streamlined and rapid manner, and how quickly the FOS should be expected to respond to consumer complaints.