The new financial ombudsman, Walter Merricks, will unveil plans this week to bring in legally binding, internal-complaints procedures for all financial services companies. They will include rules on who should deal with complaints, and fixed timescales for sorting out customers' grievances.
At the moment, companies do not have to abide by any rules on dealing with complaints, and in some cases customers can find their complaints being dealt with by the very person they are complaining about. "Complaints procedures are not externally supervised by a regulator," Mr Merricks said. "The creation of the new Financial Services Authority (FSA) is a real opportunity to create some new rules."
The new, single, FSA Ombudsman replaces a confusing system of multiple schemes, and means all consumers will have one point of contact - whether their complaint is against an insurer, fund manager or independent financial adviser.
The changes should also lighten the workload for Mr Merricks' staff at their new building in London's Docklands. Under the rules, complaints have to go through internal company procedures before they can be passed to the Ombudsman's office.
A spokesman for the Association of British Insurers (ABI) said the finance industry is already making progress in introducing better systems. "Complaints handling is taken very seriously by insurance companies but they realise there is scope to do things better," he said.
The ABI says it takes an average of two weeks to sort out a general insurance complaint and five weeks for a life insurance or pensions problem.