Endowment complaints soar to record levels

Click to follow
The Independent Online

The Financial Ombudsman Service (FOS) says it received almost twice as many complaints over mortgage endowment mis-selling this year than its original forecasts, with some 67,000 people expected to have appealed to the FOS during the 12 months to end of March.

The Financial Ombudsman Service (FOS) says it received almost twice as many complaints over mortgage endowment mis-selling this year than its original forecasts, with some 67,000 people expected to have appealed to the FOS during the 12 months to end of March.

Last year, the FOS predicted it would receive just 35,000 complaints about mortgage endowments this financial year, after hitting a record of 52,000 complaints in the year to the end of March 2004. However, the proliferation of endowment complaints handling agencies and the launch of an advertising campaign by the Financial Services Authority (FSA) to encourage people to claim, have seen the numbers soar.

Endowment complaints now represent more than two-thirds of the Ombudsman's workload, and it expects the numbers to continue increasing, during 2005 before falling away in 2006, as time-barring begins to kick-in.

Publishing its plan and budget proposals for 2005/06, the Ombudsman revealed yesterday that the total number of complaints received across the entire financial services industry is set to hit 108,000 for the year to the end of March - a 10 per cent rise on last year. The FOS predicts the total number of complaints will increase by a further 6 per cent over the 12 months from April 2005.

After increasing its staff by almost 20 per cent over the past year, the Ombudsman added that it expects to hire a further 100 staff this year.

The rising number of complaints suggests many financial services industry customers continue to receive poor advice and poor treatment. The news is a blow to the FSA, which has been taking a more heavy-handed approach over the past 15 months, to ensure that companies raise standards. But David Cresswell, a spokesman for the FOS, said that the rising number of complaints may illustrate an increase in consumers' willingness to complain, rather than a deterioration in standards. "Its not necessarily an indication that the industry is doing more wrong, it may be that consumers are more empowered. Consumers are far more questioning and demanding than they were."

The FOS can only deal with complaints once a customer has exhausted efforts to resolve matters with the company involved. About 2 to 5 per cent of all industry complaints are referred to the FOS.

Looking for credit card or current account deals? Search here

Comments