On 6 September, the Financial Ombudsman released its latest six-monthly complaints data.

The data compiles complaints relating to banks, insurers and other financial businesses. The figures published this week show that the ombudsman took on 169,132 new cases in the first half of 2016 – up by 3% compared to the previous six months.

The majority of complaints continue to be about payment protection insurance (PPI); these made up 54% of new complaints, totalling 91,381 new cases.

Complaints about non-PPI issues are growing

Although the PPI complaints show a slight decrease, complaints about non-PPI fiscal products are on the rise.

These complaints increased by 8% to 77,751 over the six months to the end of June.
Payday lending complaints have doubled compared to the last six months of 2015.

Not all complaints made to the ombudsman are upheld. Over the last six months, 48% were upheld (i.e. the ombudsman found in the complainant’s favour). The percentage of complaints upheld varies wildly from sector to sector, ranging from 3% to 92% across the individual businesses.

Learning from the past to improve the future

Commenting on the figures, chief ombudsman Caroline Wayman said:

“I believe it’s important that we continue to share our insights into complaints to help businesses to avoid the mistakes of the past.”

What can firms do to avoid being complained about?

Although the Financial Ombudsman is a separate body to the Financial Conduct Authority (FCA), if firms strive to meet the FCA’s regulations, they will increase their chances of avoiding complaints.

  • ‘Treating Customers Fairly’ is a major ethos of the FCA, and it has set out six customer outcomes that should be achieved if the TCF guidance is followed. Familiarising yourself with the TCF approach and the customer outcomes will help to ensure you meet the regulator’s – and customers’ – expectations.

Perivan Solutions TCF FAQs document and this blog on strategies for success in achieving the customer outcomes will help.

  • Your communications with customers are essential to setting expectations. Recently, the FCA has criticised insurers for the quality of their renewal communications. Ensuring all your communications with prospects and customers is up to scratch minimises the potential for complaints.
  • Similarly, it’s crucial that you’re transparent about your products and services, your performance and the returns investors can expect. Making sure you have the correct disclaimers, disclosures and risk warnings – and that they meet the regulator’s requirements on prominence – is essential from a compliance perspective.

It’s also common sense from a customer service point of view, as they will influence customers’ beliefs about the products and services they buy. Again, making sure their expectations are realistic will help to manage expectations and minimise complaints.

Making sure the solutions you sell are suitable for the buyer is also vital. The FCA recently carried out a thematic review into suitability – with the conclusion that firm culture is the key to ensuring advice and recommended products are suitable. Creating a culture with in-built good governance is essential – This blog has tips for spotting any shortfalls in your own corporate culture.

With complaints on the rise, firms need to do all they can to ensure they stay on the right side of the regulator. Automating your marketing and compliance processes so that reviews and approvals of financial promotions and sales materials are mandatory is one way to minimise your chances of regulatory breaches.

You can read more on how automation can help to improve regulatory compliance in Perivan Solutions whitepaper, The benefits of automated workflow systems. You can download your free copy here.

Author: Dimitriya Paunova

Solutions Marketing Manager at Perivan Solutions

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