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Mortgage endowment complaints against IFAs on the increase, says FOS

Mortgage endowment complaints remain high with a slight increase in IFA complaints despite a small drop overall, according to the FOS’s annual review.

The review shows that during the year, the FOS received 94,392 new complaints in total with 46,134 new mortgage endowment cases. This relates to around 175 every working day, compared with 250 cases a day in the previous year.

While the overall proportion of disputes involving independent financial advisers fell slightly by two per cent, the proportion of mortgage endowment complaints against IFAs rose by four per cent, following a 14 per cent increase in the previous year.

Complaints against IFAs saw mortgage endowments represent 83 per cent of the total, while other investments only represented 8 per cent.

However, life insurance and investment product providers continue to have the highest number of mortgage endowment complaints levelled at them at 54 per cent. Banks represent 19 per cent, IFAs total 21 per cent, building societies with four per cent and other providers at just two per cent.

Although the number of new disputes involving mortgage endowments fell by a third – from 69,149 cases to 46,134 – endowment complaints still accounted for half the new caseload of the FOS during the year.

Chief ombudsman Walter Merricks says: “This year marked the completion of over 500,000 financial disputes by the Financial Ombudsman Service since we were set up in 2001. Half of these complaints have involved mortgage endowments – although the record numbers of these cases is now at last decreasing, as we had predicted was likely to happen.”

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