The Financial Ombudsman Service (FOS) has experienced a sharp increase in disputes over the quality of advice and service customers are receiving. General insurance has placed second accounting for 35 per cent of all accepted disputes (up significantly from last year).
Key points:
- Number of disputes handled by the Financial Ombudsman Service jumped 16 per cent to a record 39,470 last year
- The FOS identified 192 systemic issues affecting almost one million customers
- Around 40pc of all complaints involve banks, while insurance claims are the fastest growing problem
According to the FOS annual report, the total number of disputes across the sector jumped by 16 per cent to a record 39,470 in the 2016-17 financial year. Phone inquiry numbers also rose by 10 per cent to 235,372 over the year, or almost 1,000 calls a day and visits to the ombudsman’s website rose by 13 per cent to more than 675,000 for the year.
Chief ombudsman Shane Tregillis noted much of the work was dealing with systemic issues, rather than just one-off problems.
“We identified and referred 192 possible systemic issues to financial services providers for response and resolved 66 definite systemic issues,” he said.
On the rise in general insurance disputes Tregillis said that they appeared to have been caused by recent changes specific to the sector.
“Higher claim numbers, organisational changes and the impact of Cyclone Debbie, all of which may have affected insurers’ internal dispute resolution,” he said.
What the disputes were about
| Category | Number of disputes | Percentage change |
|---|---|---|
| Credit | 10,973 | +43pc |
| General insurance | 8,756 | +35pc |
| Deposit-taking | 1,861 | +7pc |
| Payment systems | 1,331 | +5pc |
| Investments and advice | 1,292 | +5pc |
| Life insurance | 1,018 | +4pc |
The proportion of disputes closed by agreement between the applicant and the FSP continued the reduction of recent years, from 61 per cent last year to 60 per cent. The proportion of disputes resolved through a FOS decision – because an agreement could not be reached – was 15 per cent (the same as last year).