Consumer Confidence in Banks Still Rock Bottom

As the Financial Ombudsman Service (FOS) last week released its latest annual report, figures show that complaints to the service have rocketed over the past year, leaving consumer confidence at rock bottom, according to the Chief Ombudsman.

The FOS deals with complaints that are unable to be resolved between consumers and financial businesses and offers a free and impartial service to consumers. Over the past year the FOS has witnessed an unprecedented rise in queries and complaints from disgruntled customers over a range of financial products and services.

During the last financial year (2012/2013) enquiries to the FOS reached daily highs of 7,000, while more than two million initial enquiries and complaints were made to the body throughout the course of the year. Of these initial customer enquiries, 1 in 4 turned into a formal dispute with a record 508,881 new cases recorded during the same time.
 
As the total amount set aside to compensate victims of the mis-selling of Payment Protection Insurance (PPI) surpasses £15 billion, it is little surprise that PPI complaints accounted for 74% of the total complaints to the FOS during the last financial year contributing toward the surge in grievances.

While a colossal 140% increase in PPI complaints was recorded by the FOS last year, there was also a 92% rise in all cases. Chief Ombudsman Natalie Ceeney has suggested that consumers are becoming increasingly savvy, and as a result are taking action to complain, with a “much stronger consumer voice”.

Meanwhile, banks have come under fire for their inadequacy in resolving PPI grievances. Talking to the Mail on Sunday Natalie Ceeney explained that the FOS are seeing evidence of some banks “tightening the criteria” under which they will agree to compensate customers who were mis-sold PPI, making it increasingly difficult for consumers to reclaim what is rightfully theirs.

Echoing the Ombudsman’s concerns that banks are narrowing the terms of redress, Richard Lloyd of the consumer group Which? added “These shocking figures show the banks are still letting their customers down and failing to help consumers with legitimate claims to get the compensation they’re rightly owed”. Based on the FOS figures, the magnitude of customer upset is widespread, and the notion that banks are in fact making it increasingly difficult to claim is discouraging to hear.

The British Bankers Association (BBA) has on the other hand defended criticisms from the FOS and consumer groups, instead maintaining that unscrupulous claims from Claims Management Companies (CMCs) are to blame for the lengthy process in compensating customers.

While we can only speak for ourselves as a CMC, we can confidently say that submitting erroneous claims to lenders would be counter-productive for both our customers and business. We aim to resolve complaints as quickly and efficiently as possible, and while there may be select companies who operate under bad practice, at We Fight Any Claim we are focussed on obtaining redress for our customers.

Based on the figures released by the FOS last week, it is clear that consumers are becoming more pro-active in tackling their grievances with banks. While select banks have responded to the PPI scandal by assigning entire departments to the process of redress, there are many who, according to the Ombudsman are restricting the conditions of compensation for customers. With the prospect of a frustrating and lengthy claims process, many consumers may find themselves discouraged from pursuing a claim, a worrying prospect we hope to see prevented by appropriate action from the banks.