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Struggling firms failing with complaints handling, says Walter Merricks

Firms struggling to survive the credit crunch are not taking enough care when dealing with rising consumer complaints, according to the Financial Ombudsman Service.

In the latest issue of Ombudsman News, chief ombudsman Walter Merricks says increasing numbers of complaints are resulting in upheld decisions.

He says: “Everyone seems to accept that complaints are bound to rise in times like these, and I can confirm that this is happening already.

“But if these complaints were simply a symptom of stressed consumers seeking a desperate lifeline, and throwing a hopeless complaint to the ombudsman, I would expect the rate at which we uphold complaints to fall. Sadly it is rising.

“And it is clear that the rise is attributable in part to stressed businesses rejecting complaints they would previously have taken more care to investigate and might have settled.”

The FOS has forecast a rise in complaints next year to 150,000, up from 90,000 this year.

Merricks says the FSA warned firms in its financial risk outlook against cutting back their complaints-handling resource, an area he says the FSA will scrutinise more closely.

He says: “I suspect that the lowered heads and furrowed brows I have seen recently indicate that firms are wrestling with how to comply with the FSA’s complaints-handling requirement and at the same time make the right calls in managing their businesses through this recession. For their employees and their customers, I hope they succeed.”


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