Complaints over endowment sales rocketed by 197 per cent to an estimated 9,300 in the 2000/2001 tax year from 3,135 in 1999/2000, according to latest figures from the Financial Ombudsman Service.
By the end of last year, the ombudsman says it was getting 240 complaints a week and it expects them to make up to 55 per cent of total complaints this fiscal year.
But the FOS says IFAs are only responsible for 15 per cent of the rise in endowment mortgage complaints, firmly laying most of the blame on direct salesforces.
It says the division bet ween direct salesforces and IFAs is 85 to 15 for complaints in general and there is nothing to indicate the situation will be any different for endowments.
The FOS has been forced to recruit more staff to deal with the complaints. By the end of the next fiscal year in April 2002, it expects to have 179 employees dealing primarily with endowment cases.
The next biggest group is the customer enquiries section, which has about 90 staff.
Financial Ombudsman Service communications director David Cresswell says: “We expect the endowment situation to be similar to the general split between direct sales and IFAs for complaints which is 85 to 15 per cent.”
The ombudsman has fin-alised its plans for future funding of the service.
As had been expected, half the funding will come from a general levy which is paid by all firms and half comes from per-case fees which are determined by the number of complaints that a firm is involved in.