As regulated solicitors, in an effort to keep legal costs down for our clients, the majority of our Financial Adviser Claims and claims for Pension Compensation tend to end up with the Financial Ombudsman Service (FOS). The Financial Ombudsman are an independent organisation that help resolve disputes between consumers and their financial services providers. The FOS effectively act as a mediator and have the power make a ruling on whether your claim can be upheld.
As the FOS is a free service funded by a levy on the financial services industry, it is often worth trying to resolve matters through them before incurring the costs of pursuing a claim through the courts.
However, be aware when pursuing a financial adviser claim or pensions compensation claim down this route, that the FOS have seen a significant increase in consumer complaints, with 133,019 cases received between January and June 2024. This is more than 40% higher than the 93,114 complaints filed in the same period of 2023. According to data released on 24 October 2024, a total of 242 companies appeared in this year’s complaint records, compared to 220 in 2023.
The overwhelming majority of the 101,031 complaints over banking and credit issues indicates year-on-year growth by sector, and comprised complaints relating to credit card disputes, unaffordable lending, car finance problems, fraud, and scams. More than half of these claims have been submitted by professional representatives like us on behalf of consumers.
The good news is that the FOS upheld 35 percent of complaints filed on the side of the consumers for consecutive years after a marginal reduction from the 37% in the year 2023.
To further break down complaint statistics, the FOS provided data by sector for the first half of 2024:
- Banking and credit: 101,031 complaints (up from 56,690 in H1 2023)
- General insurance/pure protection: 22,489 complaints (a decrease from 24,496 in H1 2023)
- Mortgages and home finance: 3,685 complaints (down from 5,002 in H1 2023)
- Decumulation, life, and pensions: 3,369 complaints (down from 4,189 in H1 2023)
- Investments: 2,305 complaints (down from 2,593 in H1 2023)
- Funeral planning: 140 complaints (a slight decline from 144 in H1 2023)
According to Chief Ombudsman and CEO Abby Thomas, businesses must put consumers at the heart of their service, as a high volume of complaints suggests that businesses may not have met customer expectations. “Businesses should put consumers at the heart of their service,” she said. Thomas further urged for transparency, fairness, and compassion in dealing with customers, particularly when handling cases with professional representatives who ensure that claims are backed by solid evidence.
Thomas encouraged consumers who feel they have been mistreated by financial services firms to take their complaints directly to the FOS, whose service guarantees an unbiased, straightforward, and free resolution process. If you’ve faced issues with your financial adviser, don’t hesitate to seek help.
Our thoughts
In spite of the strain on the ombudsman it is still a route to financial redress that we would advise looking to pursue especially with lower value claims (claims below £10,000).
HT Legal Services specialises in guiding clients through financial adviser claims, helping ensure fair treatment and accountability.
