Banks’ complaint handling processes has been criticised by the FOS as it reveals 65 per cent of all cases in 2010/11 were against banks.
The Financial Ombudsman Service has criticised banks’ complaint handling processes as it reveals 65 per cent of all FOS cases in 2010/11 were brought against banks.
The FOS’s annual review for the year to March 31, 2011, published this week, shows the number of bank-related complaints rose to 65.5 per cent over the year, from 61 per cent in 2009/10.
In 2010/11, banks accounted for 80 per cent of complaints about banking and credit, 77 per cent of PPI complaints and 68 per cent of mortgage complaints. Banks also accounted for 21 per cent of investment complaints and 9 per cent of pension complaints.
The FOS says financial services firms are fighting complaints more aggressively. It cites one case where a major high-street business resisted settling investment complaints without ombudsman intervention and another case where the business tried to prove the investment risk was mitigated by other factors.
The FOS says: “Disputes we have seen over the year have been characterised by the businesses involved taking entrenched positions and showing reluctance to accept what appeared to us to be clear evidence of misselling.
“The evidence of businesses taking a more legalistic approach to consumer complaints is disappointing.”
The FOS says it continues to see complaints about misleading fund descriptions, particularly involving the use of terms such as “cautious” and “cash”. The ombudsman says it is pleased the issue has been taken up by the regulator and trade associations but says this may have been overdue.
In November, the FSA labelled the use of the word “cash” in fund names as “potentially misleading” and unveiled a clampdown on money market funds.
The FOS says it is also seeing an increase in complaints from homeowners who have had applications to transfer their mortgage to another property turned down. It attributes this to a rise in porting complaints to tightening lender criteria.
The FOS says: “In our experience, it is helpful if a decision on lending is clearly communicated and explained.”