The Financial Ombudsman Service (FOS) received almost 40 per cent more financial complaints, while pension complaints decreased marginally, in the first half of 2024.
The ombudsman received 133,019 complaints between January and June 2024, compared to 93,114 in 2023. Banking and credit complaints rose sharply to 101,031, up from 56,690 in 2023, driven by issues like credit disputes and fraud, with over half submitted by professional representatives, up from a quarter in 2023.
Additionally, life and pension complaints decreased to 3,369 from 4,189 in 2023, alongside declines in insurance, mortgage, investment, and funeral planning complaints.
Chief executive and chief ombudsman Abby Thomas says: “Businesses should put consumers at the heart of their service but the high level of complaints we receive shows that’s not always the case. It’s vital that businesses are open and transparent with their customers, treating them with fairness and understanding. Whilst professional representatives have an important role to play, they must ensure that their cases are well evidenced and have merit. If people don’t feel they’ve been treated fairly by their financial provider, they can come directly to our service and we’ll see if we can help. Getting a fair answer is free and easy.”
Simplify Consulting lead consultant Dom House says: “The FOS H1 2024 complaints data out today is extremely disappointing. With the number of complaints totalling 133,019 between 1 January and 30 June 2024, this represents a 40 per cent increase on 2023’s H1 data. Complaint volumes across all FCA regulated firms have continued to increase over the last 10 years but now, around 18 months into Consumer Duty, it seems the industry is still to move the dial significantly on complaints.
“Firms should now be looking at their complaints data to understand how they can reverse this trend and consider whether the changes they’ve made for Consumer Duty have had the impact intended. Consumers expectations have been raised as new technology becomes mainstream in the financial services industry and firms need to get a grip by addressing the imbalance between prevention and cure by focusing on the root cause and prevention of complaints before they are raised.
“From our own research, we know that administrative errors and delays are some of the biggest issues for customers complaining, and firms need to take action to tackle problems in this area. One of the biggest areas we are seeing increasing focus is on Transfers, which has historically been the ‘problem child’ of firms in terms of their service. Our research also found that 76 per cent of complainants said it had impacted their loyalty to their provider, with 18 per cent having moved provider as a result of their complaint.
“Consumer Duty has made complaints more visible to senior leadership in firms. This is a positive, and increasingly we are seeing firms not just reviewing the complaints numbers periodically, but taking a closer look at how the complaints function interacts with the rest of the business. Those that can build an effective complaints strategy, will not only be delivering better outcomes for clients and be meeting Consumer Duty requirements, they might well reduce the risk of losing a large proportion of their clients.”