More confident consumers are pushing the enquiry rate up dramatically at the Financial Ombudsman Service. The resolution service, which is free to the public, saw its overall case load surge by 70 per cent from 1.3 million enquiries and complaints in the year to March 2012 to nearly 2.2 million in the year to March 2013.
While payment protection insurance (PPI) now accounts for 70 per cent of the Ombudsman's work, other areas are also growing fast. Mortgage enquiries are up 25 per cent, current accounts 34 per cent and pet insurance 50 per cent on last year.
Chief Ombudsman Natalie Ceeney believes the current level of consumer confidence is "irreversible":
"We've now got a much more vocal consumer out there. It's not a weird minority. This is what you do."
She cites the horsemeat scandal and the U-turn on HMV vouchers in January as examples of people power requiring retailers to treat their customer base well.
When music and DVD retailer HMV went into administration this year, the administrators at first said they would not honour vouchers bought beforehand. But public outrage then forced them to change their minds.
Similarly, Ms Ceeney thinks that public pressure encouraged food retailers to respond well in general over horsemeat, accepting their mistakes and promising better service.
Turning to banks – who are responsible for 45 million of the total 50 million PPI policies sold – the Chief Ombudsman finds a more negative approach.
She says: "A mind shift is needed in financial institutions. If banks are serious about rebuilding trust, we need to show consumers we are listening."
Banks are clearly underperforming some other sectors. On bank PPI cases decided by the Ombudsman, the customer wins in 70 per cent of cases — but that percentage falls to 21 per cent among building societies.
On non-PPI issues, customers win in 33 per cent of cases against banks – twice the level of the win rate, 17 per cent, against building societies. These statistics mean that banks have poorer complaints-handling systems.
The Ombudsman is encouraging all institutions to be more reasonable with customers. Two pilot schemes took place in the last year which the service wants other organisations to try. In one scheme, PayPal. while trialing a fast-track system with the Ombudsman, achieved an 80 per cent satisfaction rate with customers who had complained about it.
It did not pay out more money nor did it lose more cases in this trial, but it was resolving issues through the Ombudsman within a fortnight rather than the usual several months.
Normal satisfaction rates are about 50 per cent, says the Ombudsman. Its research suggests that, if a customer's complaint or problem is handled professionally and courteously, customer satisfaction can actually increase.
Many consumers are mainly seeking an apology when they complain. If they get one, they often feel very satisfied because they have been listened to and have achieved a just outcome.
A second pilot scheme, involving Royal Bank of Scotland compensating customers who were unable to access their accounts during an IT glitch last summer, saw many people compensated within days.
"Customers really appreciated the effort we put in," says Ms Ceeney.
Enquiries to the Ombudsman are likely to keep rising. So far only 10 per cent of PPI-holders have complained. "Will it go up to 20 or 50 per cent?" asks Ms Ceeney. "I really, really don't know. Is PPI going to rumble on for several years? Yes."
Some complaints experts believe PPI was such a flawed product that most people who had it could be due a refund. The banks have been pushing for a deadline to be set, stopping people from lodging complaints afterwards. But since many consumers are unaware that they ever bought PPI, regulators could provoke an outcry if they give in to industry requests on the issue.
Hardship is another cause for increasing complaints. A quarter of mortgage queries to the Ombudsman relate to it. These are the kind of cases where a discounted rate comes to an end for a mortgage borrower who is then pushed towards a much more expensive loan which he or she cannot afford. The Ombudsman is "often broking solutions" in these circumstances, says Ms Ceeney. "It may be that one side is not totally right and that the other side is not totally wrong."
This approach on mortgage cases illustrates a more positive tone from the Ombudsman. Rather than simply wishing to resolve technical complaints, the service is trying to encourage consumers and institutions to behave well and clearly towards each other.
"The notion of a 'complaint' is increasingly outmoded," says Ms Ceeney. "Most people don't relate to it. Instead, people say: 'I'm annoyed with my bank.' It's about dissatisfaction."
By comparison, people who think they probably unwittingly ate horsemeat a year ago could feel a sense of grievance but would find it difficult to produce the receipts and proof necessary to make a complaint. In response, Tesco took out advertisements to make full apologies, offered refunds on any products which were potentially contaminated that consumers could bring in to stores, investigated the issue and promised that nothing similar would happen again.
Ms Ceeney is concerned that if banks and other financial institutions do not learn from their customers, in the way that the supermarkets seem to have done, both sides will suffer.
She says: "We've seen a rise in banks talking about 'compensation culture' in a negative way. We are in danger of demonising consumers. Either banks use these issues as an opportunity or they become disenfranchised from their customers."
But some organisations are dealing relatively well with customers. Only 17 per cent of consumers bringing Ombudsman complaints about PayPal win their case, as the money-transfer organisation appears to have a functional, in-house complaints service. Similarly, only 23 per cent of consumers win against Nationwide.
By contrast, 93 per cent of consumers have been winning against Lloyds TSB subsidiary Black Horse. Some products seem either to encourage poor selling procedures or are badly designed.
For example, the Ombudsman finds in favour of 80 per cent of people who complain about mobile insurance cover. For those complaining about travel insurance, nearly half (48 per cent) win their cases at the Ombudsman.
Overall, across all categories of financial product, consumers win in just under half (49 per cent) of cases.
Travel insurer refused to pay for operation
She was 27 weeks pregnant and flying off to New York for a week, but architect Caireen O'Hagan was not worried. She had her travel insurance in place.
There were cysts on her ovaries but these provided no cause for alarm, and her doctors classified her pregnancy as uncomplicated.
But, when she got to the Big Apple in December 2010, one of the cysts became twisted and had to be removed in emergency surgery. The hospital bill came out at $21,000 (about £16,000). So she provided her insurer with all the paperwork it needed, including letters from her doctors saying that the complication had been totally unforeseen.
Nevertheless, the insurer refused to pay on the grounds that the cysts were a pre-existing condition. She then took the case to the Ombudsman which – famously overloaded with handling payment protection insurance claims – took a year to come to its conclusion that the cysts did not represent a pre-existing condition. This was the routine, first-level, informal decision which most financial institutions usually accept and implement. But the insurer opposed this suggested conclusion and so the case rolled on to a formal decision. which came through at the end of 2012.
As well as ordering the insurer and reinsurer to foot the bill, the Ombudsman made an order for £500 compensation.
"The Financial Ombudsman was very good. Every two or three months they sent me a letter," says Ms O'Hagan.
Financial Ombudsman Service: financial-ombudsman.org.uk, 0800 023 4567, @financialombuds on Twitter
Ombudsman: complaints data by organisation: ombudsman-complaints-data.org.uk