- Dispute resolution service, the Financial Ombudsman, is expecting more than 181,000 consumer complaints in the next financial year.
- Many of these complaints will be driven by everyday issues such as unaffordable lending, travel and motor insurance, and fraud and scam cases.
- The complaint trends come as the Ombudsman seeks feedback on new proposed charges for professional representatives.
The Financial Ombudsman Service has set out the trends in new complaints it is expecting to see in 2024/25 in a consultation paper on its plans and budget. The consultation closes on 30 January.
The plans highlight the key personal finance issues where the service expects to see new complaints about financial providers. These include:
- A continued rise in disputed transactions, driven by the increasing volume of financial fraud and scams.
- Cost-of-living pressures leading to a rise in irresponsible and unaffordable lending complaints.
- A rise in account closure complaints prompted by higher public awareness of the issue.
- Motor insurance complaints continuing at a high level, partly due to widescale delays in being able to repair vehicles and impact of secondhand car market on valuations.
- Further complaints about car finance commission arrangements which will be considered in light of changes made by the FCA to complaint handling rules in this area.
Commenting on the trends set out in the service’s plans, Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said:
“Given cost-of-living pressures it’s imperative that, now more than ever, consumers understand their finances and are treated fairly and transparently by financial service providers.
“Looking ahead we know our service will see a high level of complaints and that those disputes will likely focus on the critical issues that impact people’s everyday lives. This includes perceived unaffordable lending, mortgages and complaints about people’s savings and current accounts.
“We are planning to be more ambitious next year, resolving complaints more quickly and improving the service we offer. At a time when all businesses are facing financial pressures, we are also reducing the cost of our service to industry.”
In the next financial year the Financial Ombudsman has set itself a new target of resolving 90% of cases within five months. This builds on the progress it has made to get consumers and businesses answers to disputes as quickly as possible while maintaining the quality of judgements.
The consultation sets out plans to reduce the cost of the service to industry in the year ahead. It proposes to reduce the case fee by £100 per case to £650 and reduce its compulsory and voluntary jurisdiction levies on businesses. This results in an effective £60 million reduction in case fee and levy costs to businesses, once inflation and increases in the number of cases resolved are taken into consideration.
The service is also seeking feedback on proposed new charges for professional representatives for bringing cases to the Financial Ombudsman Service. It is inviting views on whether and how a charging regime might be implemented, including on the level of any fee itself; the impact on complaint volumes, the potential impact on different groups of complainants, and the lead time required for businesses and professional representatives to be ready.
