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FOS swamped with “single-issue” complaints

The Financial Ombudsman Service has received over 25,000 payment protection insurance complaints since January 2008, which it says is part of a wider surge in single-issue complaints.

Chief ombudsman Walter Merricks 
says responding to large-scale surges in complaints driven by single-issue consumer campaigns is now becoming a regular feature of the FOS workload.

He says: “Traditionally, of course, the ombudsman’s role was seen as dealing with individual disputes relating to one-off issues. So some eyebrows may be raised at the idea of the ombudsman service now handling a workload involving thousands of similar complaints, all involving the same financial product or problem.

“The actions we necessarily have to take in order to address the complaints may result in our being accused of acting as a surrogate regulator, but that may be inescapable.”

Merricks says the “ideal solution” to mass problems is for all financial businesses to treat their customers fairly either because businesses recognise it is the right thing to do, or because of effective regulatory scrutiny.

He says: “Where this does not happen, and a single issue arises that directly affects very large numbers of consumers, it would surely best be resolved collectively rather than relying on individual consumers each having to make their own separate complaint. If there has been widespread consumer detriment, widespread redress is needed.

“We need to ensure that none of this distracts us from our central purpose of underpinning confidence in financial services for the benefit of consumers and the financial services industry – a function needed now more than ever.”

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