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IFA complaints fall as bank cases soar

Complaints to the Financial Ombudsman Service about IFAs have plummeted from 12 per cent of total cases in 2006/07 to just 4 per cent in 2007/08 while bank complaints rocketed.

The FOS annual review says this is linked to a sharp decrease in complaints about mortgage endowments, which fell by 70 per cent from 46,134 to 13,778.

Overall, the number of mortgage and banking disputes has more than tripled, with a record total of 123,089 new complaints, a 30 per cent rise.

Payment protection insurance complaints increased six-fold, with most cases now related to how policies were sold rather than rejected claims.

The FOS says over 95 per cent of businesses that fall under its umbrella received no complaints, while six of the UK’s biggest financial services groups were involved in half of the total number of cases.

A spokesman says the companies will not be named at this point but adds that their anonymity is being reconsidered as part of Lord Hunt’s review of the ombudsman.

The FOS saw a 10-fold increase in complaints about banks’ charges on current accounts. The ombudsman says this is probably due to the current legal test case in the High Court involving the Office of Fair Trading and eight current account providers.

FOS chairman Sir Christopher Kelly says the ombudsman was hoping for an overall reduction in case numbers but the economic climate has led to a record number of new complaints.

He says: “The sudden surges in banking and insurance disputes this year have meant that predicting, managing and dealing with complaint volumes has been more of a challenge for us organisationally than ever before.”

But he adds that the FOS welcomes the broadening diversity of consumers using the service. He says: “Making our service accessible to everyone is a top priority identified by Lord Hunt in his recent review of the openness and transparency of the ombudsman service.”

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