Data published by the Financial Ombudsman Service today shows how many complaints the independent, dispute resolution service received about financial businesses in the second half of 2024.
The newly released figures reveal continued high volumes of complaints with a total of 141,846 complaints received between July and December last year, compared to 95,349 complaints in the same period in 2023 (a 49% increase).
The raised levels of complaints were driven by banking fraud, credit affordability disputes and motor finance commission cases.
This significant increase in caseload underlines why the Financial Ombudsman Service is working closely with HM Treasury and the Financial Conduct Authority (FCA) to modernise the dispute resolution system so that the Service can continue to deliver for consumers, small businesses and financial services, as a quick and informal resolution service as an alternative to the courts.
James Dipple-Johnstone, Interim Chief Ombudsman at the Financial Ombudsman Service, said:
“Behind each case are customers waiting for an answer and we are committed to delivering fair, timely and effective resolutions for consumers and businesses alike.
“The high demand reflected in today’s data underscores not only the vital role our service plays, but also the pressing need for reform to ensure it remains fit for the future. That’s why we’re committed to strengthening the dispute resolution system – so it works better for everyone and reflects the needs of today’s financial landscape.”
Around 46% of complaints within this period (July – December 2024) were referred to the Financial Ombudsman by professional representatives. That’s compared to 22% during the same period in 2023. This growth has mainly been focused on credit affordability and car finance complaints.
Last month, the Financial Ombudsman Service, which is free for consumers who bring their complaint directly to it, introduced a new fee model to charge professional representatives who bring more than ten complaints a year. The move aims to provide a fairer fee arrangement and encourage these representatives to submit better-evidenced complaints, considering their merits more diligently before referring them.
The Financial Ombudsman recently outlined its plans to transform and improve its service to tackle the exceptional demand experienced across 2024/25. This includes increasing its staffing capacity to resolve complaints and building flexibility into its workforce so that the Financial Ombudsman Service can respond to changes in demand.
The figures released today provide firm-level complaints data for Q2 and Q3 of the 2024/25 financial year. There were 109,155 complaints from July to December 2024 in the banking and credit sector, compared to 62,139 during the same period in 2023.
In the last six months of 2024 the Financial Ombudsman Service upheld 33% of complaints in consumers’ favour, compared to 36% in the second half of 2023. However, only around 25% of complaints brought by professional representatives were found in favour of the consumer, compared to around 37% brought directly by consumers for free. The data shows that uphold rates vary per firm.
The headline figures are:
- 109,155 new banking and credit complaints in Jul to Dec 2024, compared to 62,139 in Jul to Dec 2023.
- 22,075 new general insurance/pure protection complaints in Jul to Dec 2024, compared to 22,845 in Jul to Dec 2023.
- 3,526 new mortgages and home finance complaints in Jul to Dec 2024, compared to 3,877 in Jul to Dec 2023.
- 4,345 new decumulation life and pension complaints in Jul to Dec 2024, compared to 3,996 in Jul to Dec 2023.
- 2,587 new complaints about investments in Jul to Dec 2024, compared to 2,311 in Jul to Dec 2023.
- 158 new complaints about funeral planning in Jul to Dec 2024, compared to 181 in Jul to Dec 2023.
The full data set, broken down into individual firms, is available here.
Commenting on these data, Dom House, Lead Consultant at Simplify Consulting said: “The latest FOS complaints data for the second half of 2024 remains disappointing. , this represents With the number of complaints totalling 141,846 between July and Dec 2024, this represents an increase of 49% on the same period in 2023.
“Complaint volumes across all FCA regulated firms have continued to increase over the last 10 years but now, around 22 months into Consumer Duty, it seems the industry is still to move the dial significantly when it comes to customer complaints. Our own research into this area found that 76% of complainants said it had impacted their loyalty to their provider, with 18% having moved provider as a result of their complaint.
“Complaints are made to the FOS if the customer is unhappy with the resolution from the provider. With complaints continuing to rise, it’s clear that firms need to do more to resolve customer issues in a satisfactory way.
“Consumer Duty has made Complaints more visible to senior leadership in firms. This is a positive, and increasingly we are seeing firms not just reviewing the complaints numbers periodically, but taking a closer look at how the complaints function interacts with the rest of the business. As new technology becomes mainstream, consumer expectations have been raised and firms now need to get a grip by addressing the imbalance between prevention and cure. By focusing on the root cause of complaints more firms might just be able to prevent issues being raised on the first place.
“The upward trajectory of complaints data is now becoming an unnerving trend. However, those that can build an effective complaints strategy, will not only be delivering better outcomes for clients and be meeting Consumer Duty requirements, they might well reduce the risk of losing a large proportion of their clients.”
