annual review 2010/2011 - Financial Ombudsman Service

Financial Ombudsman Servicekey facts about the Financial Ombudsman ServiceWe were set up under the Financial Services and Markets Act 2000 toresolve individual disputes between consumers and financial businesses– fairly, reasonably, quickly and informally.We can handle complaints about a wide range of financial and moneymatters – from insurance and mortgages to investments and credit.If a business doesn’t resolve a consumer’s complaint, we can step in tosettle the dispute. But the business must have the chance to sort thingsout itself first.We are independent and impartial. When we decide a complaint, we lookcarefully at both sides of the story and weigh up all the facts.If we decide a business has treated a consumer fairly, we explain why.But if we decide the business has acted wrongly, we can order mattersto be put right.Our service is free to consumers.Consumers do not have to accept any decision we make. They are free togo to court instead. But if they accept an ombudsman’s decision,it is binding on both them and the business.We do not write the rules for businesses providing financial services –or fine them if rules are broken. That is the job of the regulator.Best practice in complaints handling includes learning lessons whendisputes have arisen. So we also have a crucial role in sharing insightsfrom the complaints we see. This gives consumers greater confidencein financial services – and helps businesses prevent future problemsby learning from situations where things have gone wrong.Annual Review 2010 | 2011

Financial Ombudsman Servicekey figures about the Financial Ombudsman Service1We handled 1,012,371 initial enquiries and complaints from consumers– around 4,000 each working day.Around 1 in 5 of the initial consumer enquiries we received turned into aformal dispute requiring the involvement of our adjudicators and ombudsmen– a record 206,121 new cases, up 26% on the previous year.51% of new cases were about the sale of payment protection insurance (PPI),with the number more than doubling to 104,597 – the highest number everreceived in a year about a single financial product.The number of investment-related complaints dropped by 30% andbanking complaints fell by 9%.51% of the total number of cases we dealt with related to 4 financial servicesgroups – while 3,592 businesses accounted for just 5% of our caseload.We resolved 164,899 cases – fewer than planned, because of the legal actiontaken against us on PPI complaints (see page 40).Our involvement resulted in compensation for consumers in 51% of complaints.We resolved almost half of all disputes (apart from PPI) within three monthsand three quarters within six months.We operated on a cost-base of £106 million with an average staff of 1,300.We provided information and handled enquiries in 49 different languagesand formats – from British Sign Language to Sinhala, mpeg to Braille.We took part in over 200 seminars, roadshows, exhibitions and events.We handled 675 parliamentary enquiries and 16,706 calls to ourtechnical advice desk.We featured in 5,500 articles in the media – and 78% of adults in the UKsaid they were aware of the Financial Ombudsman Service.All figures relate to the financial year 2010/2011.Annual Review 2010 | 2011

2Financial Ombudsman Servicecontents6 chairman’s foreword12 chief ombudsman’s report18 the complaints we received32 what the complaints were about62 how we dealt with the complaints76 who complained to us116 who the complaints were about126 other work we have done130 our news updates in 2010/2011144 our board and senior people148 index151 our services for businesses and consumer-advice agencies152 what matters to usAnnual Review 2010 | 2011

Financial Ombudsman Servicean overview of how we handle cases31,012,371 initial enquiriesand complaintshandled by ourcustomer-contact division(see page 18 for more details)147,434 cases resolvedby our adjudicatorsthrough mediation, recommendedsettlements and adjudications(see page 62 for more details)206,121new casesreferred to our adjudicatorsand ombudsmen for furtherdispute-resolution work(see page 25 for more details)17,465 cases resolvedby our ombudsmenmaking formal decisions atthe final “appeal” stage of ourdispute-resolution process(see page 63 for more details)All figures relate to the year ended 31 March 2011.Annual Review 2010 | 2011

4Financial Ombudsman Serviceby the end of the financial yearwe had received a record206,121 new cases –in the previous year8.5% higher than expectedand 26% more thanSir Christopher Kelly KCBAnnual Review 2010 | 2011

Financial Ombudsman Service5chairman’s forewordAnnual Review 2010 | 2011

6Financial Ombudsman Servicechairman’s forewordcharimans forewordThis is my last annual review. I will be stepping down from the board in January2012, when my term of office comes to an end. It has been a privilege to serveas chairman of the Financial Ombudsman Service, especially during such a periodof change and challenge in financial services.As I look back over my recent chairman’s forewords, a common feature is that I havehad to comment on a marked discrepancy between what was expected at the outsetof the period under review and what actually happened as that year progressed.This is evidently the case again this year.So many different external factors can affect the volume and nature of thecomplaints referred to us that predicting our workload with any degree of certaintyis near to impossible. The ombudsman service – like any demand-led organisation– has to make some assumptions in order to plan. But we also need to build ina degree of flexibility in order to deal with unforeseen events.Consultation with our external stakeholders at the start of 2010 indicateda broad consensus that we were likely to see an overall rise of between 15% and20% in the number of new cases coming to us in the financial year 2010/2011.There was, however, a great deal of uncertainty about how many complaints wewould receive about payment protection insurance (PPI). Based on this consensus,at the start of 2010/2011 we were geared up to receive around 190,000 new casesoverall, significantly more than the record number of 163,000 we had receivedthe previous year.As predicted, we did indeed see an increase in the number of cases we received.With a record total of 206,121 new cases (26% more than last year), this increasewas 8.5% higher than had been expected.However, what no one had foreseen was that, by the end of the year, new PPI caseswould account for 51% of the overall total. There had been a hope at the startAnnual Review 2010 | 2011

Financial Ombudsman Servicechairman’s foreword7of the year that PPI cases would level-off, following regulatory guidance on howbusinesses should handle these cases. In fact, PPI numbers more than doubled.This inevitably had a significant impact on our operations during the year, as wedetail later in this annual review.Overall during the year we settled and closed 164,899 cases – a very similar numberto the previous year, but fewer than we had planned. This is attributable in largepart to the situation with PPI complaints. In October 2010, at a time when we werealready receiving record numbers of these complaints (40% more than forecast),the British Bankers’ Association (BBA) launched a legal challenge on behalf of anumber of high-street banks. This challenge, in the form of a judicial review, relatedto guidance published by the Financial Services Authority (FSA) on handling PPIcomplaints and to information on our own website about our approach to PPI cases.Judgment was handed down by the High Court at the end of April 2011 –endorsing our approach, and that of the FSA, to handling PPI complaints. Just asthis annual review was going to print, the BBA announced that it did not intendto appeal this judgment.As we describe elsewhere in this annual review, this legal action against ushas led not only to exceptionally high volumes of PPI complaints, but also togrowing numbers of cases where the banks behind the challenge have decidednot to co-operate fully with us. This has made it impossible for us to progressthese complaints as quickly as we would like. It has therefore led to a regrettablereduction in our service levels in these PPI cases, as well as to additional costs.In other areas of our casework, life has continued as normal. It has been a key partof our strategy to ensure that the situation with PPI cases does not adversely affectother aspects of our operations. The success of this strategy is seen most clearlyin the figures showing a marked improvement in the timeliness of our complaintshandling for cases other than PPI.Annual Review 2010 | 2011

8Financial Ombudsman Servicechairman’s forewordI stressed in last year’s annual review that we were committed to reducing thelength of time that consumers and businesses have to wait in order to get theircomplaints resolved. Much hard work has gone into improving this key area of ourcustomer service over the past twelve months and we are now resolving almosthalf of cases (other than those about PPI) within three months. There is, of course,still a long way to go before we reach the position we would like to be in. We aredetermined to improve our timeliness still further in the coming year.In last year’s annual review we noted the trend we were beginning to see,across all areas of our casework, for cases to be harder-fought and lesscapable of being resolved at an early stage. We thought this was likely tocontinue this year. We also expected an increase in the number of more complexcases. We were not, however, expecting so significant an overall change in theproportion of cases that can be resolved informally, compared to those that canonly be resolved with an ombudsman’s final decision.What has happened is that the proportion of cases that involved an ombudsman’sfinal decision has risen from 8% in 2008/2009 to 11% in 2010/2011 – with theactual number of ombudsman decisions increasing by 63% in the last year.There has been a significant shift towards cases that are more complex, as well as amarked acceleration in the tendency for both parties in a dispute to resist attemptsat conciliation and to pursue matters through to the very end of our process.This trend – together with the additional costs of dealing with exceptional volumesof PPI cases and the operational challenges and uncertainties arising out of theBBA’s judicial review – has resulted in our facing increased case-handling costs.The unit cost for the year rose by 15% to £639. We have taken action to increaseour efficiency, absorb inflationary pressures and cut our operating costs – and ourbudget unit-cost next year is below £600.Annual Review 2010 | 2011

Financial Ombudsman Servicechairman’s foreword9A consequence of these pressures has been that despite the cost-cutting measureswe took, we were unable to break even during the year – and our financial reservesfell by £7 million. Because of the continued operational uncertainties on PPI-relatedmatters, my board agreed in March 2011, following public consultation, that it wasprudent to increase our reserves for 2011/2012 by £25 million – as a contingencyagainst the costs involved in managing the growing volatility and unpredictabilitywe face. This was subsequently approved by the FSA. There is more informationabout our budget and reserves in the feedback statement we published on ourwebsite in March 2011.We noted in our last annual review that we cannot assume the “operating model”that served us so well in our first decade will be best suited to our users’ needsin the years ahead. Our experience during 2010/2011, as indeed throughout ourfirst decade, indicates very clearly that, for the ombudsman service, uncertaintyand volatility is the norm – not the exception. So this past year has been a veryimportant one in the continuing process to ensure our structure is fit for thefuture, to enable us to handle whatever may be in store for us.Natalie Ceeney, our chief executive and chief ombudsman, had only very recentlybeen appointed at the time of last year’s annual review. Since then she hasmade very considerable headway in reviewing how we operate. This has includedimplementing a number of important initiatives and, as she outlines in her reporton page 12, examining how we will need to adapt and develop to keep pace withour users’ needs.The regulatory structure around the Financial Ombudsman Service has also beensubject to review during the year, with the government making reform of financialregulation one of its priorities. I am pleased that as part of that regulatory review,the government has confirmed its intention that the ombudsman service shouldremain independent, with a role clearly distinct from the regulator.Annual Review 2010 | 2011

10Financial Ombudsman Servicechairman’s forewordWe will, of course, continue to work closely with HM Treasury, the FSA and – in duecourse – the new regulators, on issues that might affect our work.Towards the end of the year we made a number of changes to our non-executiveboard of directors. I am pleased to welcome Dame Janet Gaymer, Alan Jenkins andPat Stafford. All three were appointed to the board with effect from February 2011.I am grateful to John Howard, who stood down from the board, for his contributionduring his period of office.The ombudsman service has always placed considerable importance on providinginformation, in a variety of different ways, about the complaints we see and thework we do. The past year has seen a greater increase than in any year so farin the amount of data we have made available.We have, for example, doubled the information on our website about ourgeneral approach to resolving complaints. During the year we started publishingquarterly snapshots of our latest complaints data, in addition to the six-monthlycomplaints data about named financial businesses that we have been publishingsince 2009. Our directors’ report, which will be published in the summer alongwith our audited financial statements, will also contain increased managementand financial information.The feedback we have received is encouraging and suggests that, far fromoverwhelming our stakeholders with information, we have created an appetitefor more. So I am confident that this annual review contains much to interestour stakeholders. It offers more information about our work and its impact thanin any previous year. It also records a year of exceptional challenge andimportant achievement.Sir Christopher Kelly KCBMay 2011Annual Review 2010 | 2011

Financial Ombudsman Service11chief ombudsman’sreportAnnual Review 2010 | 2011

12Financial Ombudsman Servicechief ombudsman’s reportchief ombudsman’s reportI wrote my chief ombudsman’s report last year after being in post for less thantwo months. I have now completed my first year, and I can report on a very busy– but successful – twelve months for the Financial Ombudsman Service.The year marked our first decade of operations as the single ombudsman scheme,covering consumer complaints about virtually all aspects of personal finance. The worldhas changed a great deal over these last ten years. And not surprisingly, so have we.What is very clear is the extent to which consumers and businesses alike now expectto be able to engage with institutions – and those in authority – in a personalised andeasily-accessible way. We all expect issues to be resolved quickly, with a high levelof professionalism and customer service. These expectations apply as much to theombudsman service as they do to any other organisation or institution.One of my priorities over the last year, as the new chief ombudsman, has been tore-examine our “operating model” – the way in which we plan for and resource thework we are required to carry out. The existing model has worked successfully forus over the last decade – but we need to adjust it to meet the scale of our currentoperation and the challenges now facing us.A major issue has been to make sure that our organisational infrastructure isappropriately designed and resourced. As a demand-led service, we need to beready to respond to whatever complaints come our way – with significant variationin the numbers and types of disputes we are called on to resolve. This can requirevariable numbers of staff – with different sets of professional skills and knowledge.Unfortunately, we have not had the luxury of a “normal” year in which to plan aheadand re-design the service for the future. In fact, the year has been the busiest in ourten-year history. We have received more calls to our front-line consumer helpline thanever before. And even though we have been able to resolve four out of five problemsand enquiries at this early stage – by giving general advice and guidance to overAnnual Review 2010 | 2011

Financial Ombudsman Servicechief ombudsman’s report13800,000 people on what to do next – we have still had more consumers come to uswith formal unresolved disputes than in any previous year. The details are on page 25.As we describe elsewhere in this annual review, our workload this year has beendominated by one type of case – complaints about the sale and suitability ofpayment protection insurance (PPI). This issue has now been with us for a numberof years. We recorded the first substantial increase in the number of PPI cases in ourannual review for 2007/2008 – at which point the volume of cases had increasedsix-fold. We subsequently told the Financial Services Authority (FSA) formally aboutour concerns over how financial businesses were handling PPI complaints.We have not been the only body concerned with this issue over the last few years.Commentators and consumer groups have also raised concerns over how PPIhas been sold. And regulators have taken action, so that PPI cannot now be soldin the way it was in the past. The ombudsman is not a regulator. Our role is toresolve individual disputes between consumers and financial businesses. And thechallenge for us has been to deal with the 57-fold increase in volumes of complaintsabout PPI over the last four years.The ombudsman service has considerable experience of dealing with substantialvolumes of complaints. And we started the financial year 2010/2011 prepared toscale up our operation – ready to deal with an increase in the number of PPI cases,if they were referred to us. But our flexible “operating model” fundamentally relieson our being able to resolve disputes between two parties (the business and theconsumer) who both want to co-operate in resolving their dispute.In the autumn of 2010, the British Bankers Association (BBA) launched a judicialreview – on behalf of a number of high-street banks – against the FSA and theFinancial Ombudsman Service. While awaiting the outcome of this legal challenge,some businesses said they would continue to handle PPI complaints as usual. Butother businesses have effectively stopped handling PPI complaints in the normal way.Annual Review 2010 | 2011

14Financial Ombudsman Servicechief ombudsman’s reportAs the chairman has pointed out in his foreword, this has resulted in progresson most PPI cases slowing significantly – as well as to additional costs. As majorbusinesses reduce the effort they put into resolving their customers’ PPI complaints,it has also led to further record volumes of unresolved PPI cases being referred to us.Just over half of our workload this year has involved the single product, PPI.But we have also continued to see – and resolve – as wide a range of complaintsas ever, involving issues from debt and financial hardship to pension draw-downand asset allocation. On later pages of this annual review we focus in more detailon some of the trends we have seen over the year across all areas of our insurance,banking and investment casework.An inevitable feature of life at the ombudsman service is that we see where thingshave gone wrong – but not usually where things have gone right. So it might beworth highlighting, for example, just how few complaints we received this yearabout travel insurers, after the Icelandic volcanic ash-cloud disrupted travel andholidays in April and May 2010.The widespread expectation had been that we would need to gear up to deal withthousands of ash-related travel-insurance disputes. But fortunately, these disputesnever happened on that scale. Instead, the majority of travel insurers extendedcover to their customers where travel policies may have been ambiguous –and sorted out problems quickly with their customers where they arose.The level of complaints about financial businesses has been widely commented onduring the year. Complaints are, of course, a good indication of how well or badlybusinesses are treating their customers more generally. We started publishing sixmonthlycomplaints data relating to individual businesses in 2009. We also publishcomplaints data relating to financial products each quarter – showing the numberof complaints we receive, and the number we uphold, for around 60 differentfinancial products.Annual Review 2010 | 2011

Financial Ombudsman Servicechief ombudsman’s report15Making this information publicly available is having a positive impact. It raisesawareness of how different businesses handle complaints. And it encourages seniormanagers to take complaints handling more seriously.Aside from PPI, we have seen some encouraging signs of improvement duringthe year in the way some businesses are handling complaints. Complaints abouta number of products other than PPI have now started to fall. This is especiallyencouraging, given the tough economic climate and the financial difficultiesexperienced by increasing numbers of consumers. I am sure it is proof of a realcommitment to better complaints handling and improved customer service atsome financial businesses.From my own discussions over the year with the heads of major banks and insurers,I know that many businesses are now putting high-calibre senior managers in chargeof their complaints teams – and that they are aiming to reduce both the number offront-line complaints they receive and the proportion of unresolved disputes thatare then escalated to the ombudsman service. This is very welcome news – andsomething we actively support through the work we do to help businesses improvetheir complaints handling. There is more information about this on page 122.Our role is to ensure that the complaints we receive are resolved fairly andimpartially and as quickly as we are able. Over the last year we have madesignificant improvements to the way we work, so that we can offer the service thatcustomers now expect, on the scale at which we now operate.One of our priorities has been to resolve complaints more quickly. As the chairmannotes in his foreword, there has been a marked improvement over the year in thetimeliness of our complaints handling. This means that we resolved almost half of cases(other than those about PPI) within three months. We have also recruited additionalombudsmen, to help with the significant increase in the number of cases requiring anombudsman to make a final decision as the last “appeal” stage of our process.Annual Review 2010 | 2011

16Financial Ombudsman Servicechief ombudsman’s reportAnother priority has been to look at how we can operate more efficiently – evenmore pressing in today’s austere economic climate. By streamlining our operationalprocesses, re-examining how we use contractors, and reviewing all of our suppliers,we are already well on the way to cutting our cost base by 10%. We are using thesesavings in two ways – first, to keep our costs down, and secondly, to invest in ourpeople and service.As well as new investment in technology, we want to invest in the professionaldevelopment of our staff. This is why we have ear-marked the cost savings we havealready made, to fund enhanced training and development for our staff. We believethat by helping people develop their careers at the ombudsman service, we will beable to retain staff longer, strengthen their levels of expertise, and increase ourreputation for excellence and professionalism.At its heart, professionalism is about commitment to constant development andimprovement. The priorities we have set ourselves for the coming year – describedin our plans for a changing world which we published in March 2011 – reflect ourambitions to make sure we can offer an excellent service to all our customers,businesses and consumers alike.As well as working to improve our own service, we will continue to engage withstakeholders – including financial businesses, claims-management companiesand consumer groups – to help them resolve issues themselves where possible.This is because what we are here for – and what I hope will be evident from thisannual review – is both to settle disputes and to share what we see from thosedisputes, to help prevent future problems.Natalie Ceeney CBEMay 2011Annual Review 2010 | 2011

Financial Ombudsman Service17the complaintswe receivedAnnual Review 2010 | 2011

18Financial Ombudsman Servicethe complaints we receivedour consumer helplineOur customer-contact division runs our consumerhelpline – for enquiries by phone, letter and email.In the financial year 2010/2011 the number ofpeople contacting us – with questions, concernsand complaints about the way they had beentreated by financial businesses – continued atrecord levels.We handled a record 1,012,371 initial enquiriesand complaints during the year – a 9% rise on theprevious year and a 61% increase on the numberwe dealt with four years ago.This means that each working day during theyear our customer-contact division dealt witha record 4,000 phone calls and items of newmail from consumers.The consumer helpline is the first port of call foreveryone who phones the ombudsman serviceon one of our two easily-memorable “nongeographic”numbers – 0300 123 9 123 and0800 023 4567. Consumers can choose whichnumber they prefer – depending on which ismore convenient for them personally and which ischeaper (or in many cases free – subject to theirown phone tariff).In our customer research carried out over the year,96% of people said that they had no problemfinding our contact details.how do people phone theombudsman service?During the year we saw a 13% increase in callsto our consumer helpline from mobile phones.1,014 people phoned us from payphones (0.2%of all phone calls). We continue to remind thesecallers that we are happy to phone them back,if they are worried about the cost of calling us.One of our service standards is to answer 80% ofphone calls to our consumer helpline within 20seconds. This is a widely-accepted standard fororganisations dealing with the volume of phonecalls that we handle. During the year we answered77% of calls within 20 seconds – meaning we justmissed our target. This was largely as a result ofdealing with the 9% increase in phone calls andnew mail. However, 97% of consumers surveyedduring the year said their calls to us wereanswered promptly.Peak times for phone calls are generally onMondays between 10am and noon. We usecall-centre software and planning tools to helpmanage surges of calls throughout the day.This means that the moment the volume ofincoming calls increases – often in responseto coverage on broadcast media – those of ourhelpline advisers who are dealing with writtenrather than phone enquiries are alerted to log-onto the phone system and start taking calls.from a “fixed line” phone 80%from a mobile phone 17%“voice over internet” phone (VoIP) 1%overseas/untraceable/other 2%Annual Review 2010 | 2011

Financial Ombudsman Servicethe complaints we received19initial enquiries and complaints from consumers2007 2008 2009 2010 2011461,613550,7581,012,371448,140476,955925,095399,918389,959789,877425,942368,706794,648341,455286,359627,814phone enquirieswritten enquiries (including email)total enquiriesyear ended 31 Marchonline contactWhile many prefer to phone us and talk throughtheir enquiry personally, growing numbers ofconsumers access the information they needstraight from our website.Our website – www.financial-ombudsman.org.uk– recorded a monthly average of 225,000 visits(210,000 in the previous year). The busiest timeon our website is late morning on weekdays.However, people use our website round the clock,365 days a year, to send us emails and registercomplaints online.537,774 complaint forms were downloadedfrom our website during the year – a 23%increase on the previous year. This increaselargely resulted from the rise in complaints aboutpayment protection insurance (PPI) (see page40) – with 214,140 PPI consumer questionnairesdownloaded from our website since April 2010,when we launched this form to help streamline thehandling of this type of complaint.The other most-visited pages on our website were:■ Our various online videos – watched by 55,756people.■ Our news page (with 143 news updates addedduring the year).■ Case studies from the online version of ournewsletter, ombudsman news.Over 500 organisations now link from theirwebsites to ours – ranging from the BBC to theCornish Community Banking credit union, andfrom Cancer Research UK to the Silver-SurfersGuide. There is more information about thepeople who visit our website on page 110 ofthis annual review.“…55,756 people watched our various online videos”Annual Review 2010 | 2011

20Financial Ombudsman Servicethe complaints we receivedhow we handle initial enquiriesand complaintsThe front-line advisers on our consumer helplinedeal with all initial enquiries and complaints –giving general advice and guidance on what to doif consumers have a complaint about a financialproduct or service.Our advisers are trained to make their owndecisions about how to handle each individualcall – tailoring their response accordingly ineach case. Their aim is to sort out as manyenquiries, problems and concerns as possible atan early stage – without needing the more formalinvolvement of an adjudicator or ombudsman.The work of our consumer helpline includes:■ explaining the official complaints procedure,set out by the Financial Services Authority (FSA),which financial businesses have to follow;■ confirming the details of the person consumersshould complain to at a business, if theyhaven’t already done this;■ forwarding complaints direct to the relevantbusinesses – for them to deal with in the firstinstance, under the FSA’s complaints-handlingrules;■ directing consumers to other appropriatecomplaints bodies, helplines and websites;■ providing the facts and information thatempower people to resolve problemsthemselves;■ offering practical suggestions on sorting thingsout informally – without needing to escalate thematter as an official complaint; andIf we do not think it would be helpful or productivefor a consumer to pursue a grievance further,we explain why we believe this. We also provideimpartial guidance on any redress already onoffer. But equally, if we think there is a genuinecase to pursue, we will reassure anyone whoseems intimidated by the process of complaining.making it easy to contact usOur research throughout the year suggests thatthere are certain groups of consumers who aremore likely to find formal complaint proceduresoff-putting. The range of people who contact ourconsumer helpline broadly reflects the diversityof the population at large. It is clear, however,that some consumers are more likely than othersto pursue complaints to the next stage (eitheragainst a financial business or as a disputereferred to the ombudsman service).Younger consumers and people from lowersocio-economic groups are generally less likely topursue a formal complaint following initial contactwith us. This may relate to the type of financialproducts involved in these cases – as well as to arange of socio-economic and behavioural factors.We have carried out research in this area – andhighlight some key findings on pages 76 to 113.We are committed to identifying and, whereverpossible, removing barriers that may unfairlyprevent particular consumers from using ourservice. As part of this commitment, we haveput in place a team of specially-trained front-lineadvisers to work with more vulnerable consumerswho might otherwise struggle with forms andprocedure.■ giving an early steer on the likely outcome ofa complaint, from our informed independentviewpoint.Annual Review 2010 | 2011

Financial Ombudsman Servicethe complaints we received21During the year this team worked on casesinvolving:■ A widow in her nineties who washard-of-hearing and lived alone.English was her second language and shewas struggling to make sense of the formsand paperwork as part of her complaint. Shewas nervous of strangers and cautious aboutanswering the phone, if she did not know whowas calling. We arranged for the same caseworkadviser to phone her at the same time every twoweeks – to give her a regular update on whatwas happening on her case. The consumer feltsecure, knowing that she would be speakingto the same person – who understood herdifficulties and could explain things for her,slowly, clearly and step by step.■ A consumer with cognitive impairmentThere is more information about ouraccessibility and diversity work on page 89of this annual review.Our aim is to make our process as easy andstraightforward as possible – and more accessibleand user-friendly than the courts. But makingit easier for people to tell us their side of thestory – without feeling confused or intimidated –does not make us a consumer champion. We arejust as concerned to reduce hurdles for smallerbusinesses – who also tell us that they want aslittle red tape and bureaucracy as possible.This means a key challenge for us is to workproactively to ensure no one is disadvantaged inbringing a complaint to us – while at the sametime emphasising our impartiality. “Impartial”means we do not “side” with anyone.as a result of a severe head injury sustainedwhile on active service overseas.We arranged for him to receive letters in theformat he requested – large print on speciallytinted paper.how did consumers who contacted our helpline first hear about the ombudsman?28%from a friend, relative or colleague18%on the internet18%from a financial business14%in the media (press and broadcast)7%from a consumer-advice agency(eg Trading Standards or Citizens Advice)1%from a claims-mangement company14%other and “don’t know”Annual Review 2010 | 2011

22Financial Ombudsman Servicethe complaints we receivedThe concept of “impartiality” can be difficult forsome of our customers to accept. But it is animportant part of our work to manage expectationsrealistically – and to set out clearly what we can andcannot do. This includes explaining time limits andrestrictions that may apply. We are also very clearthat we are not the regulator – and that our workdoes not involve punishing or fining businesses.Consumers who contact our helpline at this stageto ask for initial guidance – rather than to refer anactual complaint – are 43% more likely to havefirst heard about us through word of mouth thanconsumers who pursue a formal complaint withus. However, the chart on page 82 shows thatconsumers who refer complaints to us formallyare more than twice as likely to know about usthrough the media.the value of our early involvementFeedback from our customer research shows thatour approach to initial enquiries and complaints isclearly valued by the consumers who contact ourconsumer helpline. During the year:■ 95% of people who contacted our helpline saidthey were given a clear explanation of whatwould happen next with their complaint; and■ 91% felt that the consumer adviser they spoketo knew enough to answer their questions.As a result of our focus on resolving as manyenquiries as possible at this early stage, onlyaround one in five potential complaints raisedwith our consumer helpline during the year wenton to become a case needing the more formalinvolvement of an adjudicator or ombudsman.Each year we commission independent researchto find out more about what happened next tothe four out of five consumers who contacted usinitially on our helpline – but then never returnedwith a formal complaint.The latest survey shows that of these consumers,45% were subsequently able to resolve theirproblem themselves, without needing furtherhelp from the ombudsman service (44% in theprevious year).■ 92% of these consumers felt it was our earlyinvolvement that had helped them to sort thingsout satisfactorily at this early stage (85% in theprevious year).Of the 55% of consumers who were notimmediately able to resolve their problemthemselves, after contacting our helpline forinitial help and guidance:■ 73 % said they had continued to try to sort outthe problem directly with the financial businessinvolved (and might ask the ombudsman forfurther help later on); and■ 27% said they had let the matter drop.There was a 20% increase in the proportion ofpeople who said they would continue to pursuecomplaints that they had not initially been ableto resolve directly with the financial businessinvolved. There is more information on page 103about people’s attitudes to pursuing complaints –and some reasons why people say they donot do so.“… 95% of people who contacted our helplinesaid they were given a clear explanation”Annual Review 2010 | 2011

Financial Ombudsman Servicethe complaints we received23meeting different needsOur service is for everyone. We aim to beaccessible and to adapt the way we communicatewith our customers, to meet any particular needspeople may have. This includes providing:■ An instant over-the-phone interpreting serviceto handle calls in languages other than English.■ Information on our website in 25 languages.■ Online video and audio content for people whoprefer these formats rather than text.■ Sign language and Text Relay services (formerlyknown as “TypeTalk”).■ Information in alternative formats such as largeprint, CD/DVD and “accessible text” (sometimescalled “EasyRead”).There is more information about our accessibilityand diversity work on page 89.other languagesDuring the year 1,722 consumers from 100countries outside the UK brought complaintsto the ombudsman service about UK financialservices and products.This is reflected in the demand for our interpretingand translation services, which has risen by 16%compared with the previous year – as the financialcompanies we cover increasingly carry out moreinternational business with customers round theworld.1,251 cases during the year (0.75% of our overallworkload) involved working in a language otherthan English or Welsh. In total this meant workingin 49 languages. Of these cases:■ 45% involved Western European languages –from Maltese to Swedish.■ 31% involved Eastern European languages –from Lithuanian to Romanian.■ 16.5% involved Asian languages – from Sinhalato Nepalese.■ 7% involved Middle Eastern languages – fromKurdish to Hebrew.■ 0.5% involved African languages – from Swahilito Somali.“… there was a 20% increase in the people who saidthey would continue to pursue complaints”Annual Review 2010 | 2011

24Financial Ombudsman Servicethe complaints we receivedlanguages other thanEnglish and Welsh24%Polish2.5%Portuguese13%French8%other Asian languages11%Spanish6.5%other Eastern European languages10.5%German4.5%other Western European languages5%Urdu1.5%other Middle Eastern languages4.5%Italian0.5%African languages3%Bengali3%2.5%TurkishArabicThe languages listened to most frequently duringthe year as audio-file downloads from our website– other than English and Welsh – were Chinese,Arabic and Punjabi.Annual Review 2010 | 2011

Financial Ombudsman Servicethe complaints we received25new cases referred to our adjudicatorsWhere a consumer has already complained to thebusiness they are unhappy with – and contactsus to say they are dissatisfied with the business’sfinal response – we ask them to complete andsign our complaint form. This gives us the basicinformation about their complaint – and theirpermission for us to look into it.If consumers ring us up, we can guide themthrough the form over the phone – and then sendit to them to check and sign. This is generally moreefficient, because it means we can encouragepeople to stick to the key facts.When we receive a completed complaint form,our customer-contact division sorts out all thepaperwork and checks the details. If the complaintis one we can deal with, we accept it formally asa new case – and pass it to one of our teams ofadjudicators to deal with.Under the complaints-handling rules set by theFinancial Services Authority (FSA), businessesare required to send a final response to aconsumer’s complaint within eight weeks ofreceiving it. However, in 40% of the complaintswe took on formally as new cases during the year,the businesses involved had not issued a finalresponse – even though their customers hadalready been waiting longer than eight weeks.2002: 43,3302003: 62,1702004: 97,9012005: 110,9632006: 112,9232007: 94,3922008: 123,0892009: 127,4712010: 163,0122011: 206,121year ended 31 March“… in 40% of cases the business had not issued afinal response to the consumer after eight weeks”Annual Review 2010 | 2011

26Financial Ombudsman Servicethe complaints we receivedThis figure was higher than the previous year(31% in 2009/2010). It was also significantlyhigher for complaints involving paymentprotection insurance (PPI) where – in 51% ofthe cases we dealt with – businesses had failedto send consumers a final response within therequired timescale.In our discussions with financial businesses,we stress how important it is for a business torespond fully to a customer’s complaint within thiseight-week period set by the FSA. We would liketo see as many complaints as possible resolveddirectly by businesses themselves at this stage.The complaints-handling rules also requirebusinesses’ final responses to include informationabout the consumer’s right to refer an unresolvedcomplaint to the ombudsman service. During theyear around one in five consumers said they heardabout us from the business they complained to.In the financial year 2010/2011, our customercontactdivision referred a record 206,121new cases to our adjudicators – out of a total1,012,371 enquiries and complaints raisedinitially with our consumer helpline.The record level of new cases in the financial year2010/2011 resulted from a 113% increase incomplaints about the sale of payment protectioninsurance (PPI) – following a 58% increase in theprevious year. There is more information aboutthese complaints on page 40.However, other trends during the year includedthe number of complaints about:■ motor insurance, consumer credit and travelinsurance increasing by 6%, 15% and 27%respectively; and■ health and medical insurance, current accountsand mortgage endowments falling by 13%,21% and 44% respectively.This means that since the ombudsman servicewas set up in 2000, we have received a total of1,172,719 cases, of which:■ 26% have involved the sale of mortgageendowments;■ 17% have involved the sale of PPI; and■ 4% have involved unauthorised-overdraftcharges.This is a 26% increase on the 163,012 new casesrecorded in last year’s annual review – and is thehighest number of cases we have received in anyyear since the ombudsman service was set up inthe year 2000.“… over the last ten years the ombudsman servicehas received a total of 1,172,719 cases”Annual Review 2010 | 2011

Financial Ombudsman Servicethe complaints we received27who these new cases were from during 2010/201143%complaints made by consumers themselves45%complaints made on behalf of consumers bycommercial claims-management companies5%complaints made on behalf of consumers byprofessionals (eg lawyers and accountants)3%complaints made on behalf ofconsumers by friends and family2%2%complaints made on behalf of consumers byfree consumer-advice agencies (eg TradingStandards and Citizens Advice)complaints made by smaller businesses43% of people who used the ombudsman serviceduring the year did so in a personal capacity asindividual consumers. But people wanting to bringa complaint can appoint someone else to do thisfor them. During the year 5% of cases involvedsomeone acting for free on behalf of the personwith the complaint.Over half of these cases involved peoplereferring complaints on behalf of friends andfamily. A smaller number involved a wide rangeof professional consumer representatives andadvocates, acting for free on behalf of clients.These included Trading Standards and CitizensAdvice, debt counsellors and money advisers,employers and union representatives, membersof parliament and councillors, and communityand charity workers.In 50% of cases referred to the ombudsmanservice during the year, consumers paid for theservices of someone to represent them. Theseincluded professionals such as accountantsand solicitors. But most of these “represented”cases involved commercial claims-managementcompanies.The proportion of cases we dealt with wherethe consumer was represented by a claimsmanagementcompany increased from 28% to45% during the year – directly as a result of the113% increase in PPI complaints, where claimsmanagementcompanies are most active. Thereis more information about claims-managementcompanies on page 29.Annual Review 2010 | 2011

28Financial Ombudsman Servicethe complaints we receivedcomplaints from smaller businessesWe also look at complaints brought by“micro-enterprises” – an EU term coveringsmaller businesses. To be able to bring acomplaint to us, a smaller business must havean annual turnover of up to two million eurosand fewer than ten employees.The number of complaints referred to us bysmaller businesses decreased by 35% duringthe year – from 4,758 cases to 3,093. This wasexactly the size of the increase in the numberof complaints from smaller businesses in theprevious year.The decrease in the number of complaints referredto us by smaller businesses largely reflects thefall in complaints about business banking – andin particular, about business bank-charges, whichfell from 2,265 cases in 2009/2010 to 1,359cases in 2010/2011.The 25% of complaints brought by smallerbusinesses about insurance issues included casesinvolving commercial vehicles and property, andbusiness protection insurance.71%25%4%bankinginsuranceinvestment“… 15% of people who usedthe ombudsman were self-employedor running their own business”Annual Review 2010 | 2011

Financial Ombudsman Servicethe complaints we received29However, sole traders and people running smallbusinesses do not always register their complaintspecifically as a business dispute, as they oftensee the issues as essentially personal rather thancommercial. For example, 15% of people whocompleted our customer surveys during the yeardescribed themselves as self-employed or runningtheir own business – far higher than the numberwho formally registered their case with us as abusiness dispute (and a 15% rise on this figurein the previous year).During the year we continued our outreachactivities with smaller businesses – includingworking with smaller-business trade associationsand networks (including our own smallerbusinessesforum), taking part in business startupshows and similar events, and arrangingtargeted coverage in specialist business-tobusinesspublications.cases referred by claims-management companies83%payment protection insurance (PPI) complaints10%credit card complaints4%current account complaints3%other types of complaint (including pensions,mortgages and mortgage endowments)The proportion of complaints referred to theombudsman service by claims-managementcompanies on behalf of consumers rose steeplyduring the year – from 28% to 45% of all cases.This follows steady year-on-year increases inprevious years – and is broadly in line withthe growing volumes of complaints relating topayment protection insurance (PPI), where claimsmanagementcompanies are most active. 76% ofthe 104,597 new PPI cases during the year werebrought by claims-management companies.Seven claims-management companies accountedfor 53% of all the cases we handled during theyear where consumers were represented by thistype of company. The other 47% of cases involvedover 200 other claims-management companies.We work closely with the claims-managementregulator (a part of the Ministry of Justice), toinform it about the conduct of the companies itregulates and to tackle abuses. But we cannothandle complaints about claims-managementcompanies ourselves.“… we prefer to hear from consumers in their own words”Annual Review 2010 | 2011

30Financial Ombudsman Servicethe complaints we receivedWe continue to tell consumers that we do notthink they need the help of a commercialthird-party – such as a claims-managementcompany or solicitor – to bring a complaintto us. We are a free service for consumers,but commercial companies charge consumersto bring a complaint on their behalf.We decide cases by looking at the facts – not athow well the arguments are presented. We preferto hear from consumers in their own words.And the outcome of cases shows there is nodifference – whether consumers bring them to usthemselves direct, or pay a claims-managementcompany to complain on their behalf.Our research shows that those who are more likelyto use a claims-management company to refer acomplaint to us include consumers:The kinds of consumer who are more likelyto use a claims-management company are clearlythose specifically targeted by the extensivemarketing and advertising campaigns runby those companies.The kinds of consumer who show a clearpreference for complaining to us directly,without using a claims-management company,are broadly the groups on which we havefocused our own outreach and awareness-raisinginitiatives over the last few years.There is more information about the demographicsof our customers on page 76 – and about ouroutreach work on page 128.■ between the ages of 25 and 54 (35% ofpeople in this age bracket are represented byclaims-management companies); and■ from the unskilled (DE) socio-economicgroup (almost twice as likely to use a claimsmanagementcompany as they are to bring acomplaint to us directly).On the other hand, consumers who are morelikely to complain to us direct – without using aclaims-management company – include people:■ aged under 25;■ aged over 65 (85% of whom bringcomplaints to us direct, rather than througha claims-management company);■ from the skilled and semi-skilled (C1/C2)socio-economic group;■ from non-white ethnic backgrounds.Annual Review 2010 | 2011

Financial Ombudsman Service31what the complaintswere aboutAnnual Review 2010 | 2011

32Financial Ombudsman Servicewhat the complaints were aboutnumber of new casesbanking and creditinvestments and pensionsinsurance (excluding PPI)payment protection insurance (PPI)new cases in total65,06315,48320,978104,597206,12171,70022,27819,83849,196163,01255,03822,26519,10231,066127,47169,23826,56516,63410,652123,08920,09958,56313,8981,83294,3922007 2008 2009 2010 201131.5%7.5%10%51%44%14%12%30%43%17.5%15%24.5%56.5%21.5%13.5%8.5%21%62%15%2%year ended 31 MarchAnnual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about33what financial products the new cases involved51%payment protectioninsurance (PPI)3%motor insurance1%“with-profits” andunit-linked bonds10%current accounts2.5%savings accounts1%stockbroking andportfolio management8.5%credit cards2%buildings insurance1%travel insurance3.5%mortgages1.5%mortgage endowments1%contents insurance3.5%consumer-creditproducts and services*1.5%whole-of-life policies andsavings endowments4.5%other products3%unsecured loans1.5%pensions*eg hire purchase, debt collecting and catalogue shoppingAnnual Review 2010 | 2011

34Financial Ombudsman Servicewhat the complaints were aboutwhat issues the cases involved7.5%investments and pensions61%insurance(including PPI)31.5%banking and creditAnnual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about357.5% investments and pensionsof which63% complaints about sales and advice30% complaints about administration7% other complaints31.5% banking and creditof which45% complaints about charges28% complaints about administration8% complaints about sales and advice5% complaints about transactions14% other complaints61% insurance (including PPI)of which75% complaints about sales and advice20% complaints about claims5% complaints about administrationAnnual Review 2010 | 2011

36Financial Ombudsman Servicewhat the complaints were aboutnew cases by financial product or serviceyear ended year ended31 March 2011 31 March 2010payment protection insurance (PPI) 104,597 49,196current accounts 19,944 25,252including complaints about● financial hardship 9,713 13,213● business bank-charges 1,359 2,265● direct debits and standing orders 571 737credit cards 17,466 18,396consumer-credit products and services 7,250 6,329in relation to activities covered by our consumer creditjurisdiction – including complaints about● point-of-sale loans 2,765 1,735● hire purchase 1,395 1,430● credit broking 697 341● catalogue shopping 582 755● debt collecting 512 697● store cards 480 574● debt adjusting 302 231● hiring, leasing and renting 221 283● debt counselling 155 163● credit reference agency 40 40● home credit 34 41mortgages 7,067 7,469unsecured loans 5,820 6,285motor insurance 5,784 5,451savings accounts 4,783 5,033other types of general insurance 3,904 3,275including complaints about● commercial vehicles and property 746 777● pet insurance 438 462● roadside assistance 300 226● business protection insurance 204 222● guaranteed asset protection (“gap”) insurance 182 224● caravan insurance 63 82Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about37new cases by financial product or service (continued)year ended year ended31 March 2011 31 March 2010investment-linked products 3,784 6,329including complaints about● unit-linked bonds 849 2,453● investment ISAs 824 1,301● “with-profits” bonds 683 1,056● “structured” products 550 273● guaranteed-income bonds 408 595● unit trusts 125 192● PEPs 45 93buildings insurance 3,469 3,437whole-of-life policies and savings endowments 3,328 4,199mortgage endowments 3,048 5,400other banking services 2,733 2,987including complaints about● cash machines 878 964● cheque clearing 691 773● money transfer 529 606● electronic payment 369 453● safe custody 63 74● foreign currency 55 43pensions 2,706 3,594including complaints about● personal pension plans 1,407 1,727● small self-administered schemes (SSASs) andself-invested personal pensions (SIPPs) 472 475● annuities 423 501● SERPs 196 560● income draw-down 66 158● free-standing additional voluntary contribution (FSAVC) schemes 65 99continued overleafAnnual Review 2010 | 2011

38Financial Ombudsman Servicewhat the complaints were aboutnew cases by financial product or service (continued)year ended year ended31 March 2011 31 March 2010travel insurance 2,536 2,003contents insurance 1,697 1,863portfolio management 1,148 1,040stockbroking 1,119 1,434extended warranty insurance 895 863income protection 720 776legal expenses insurance 635 644critical illness insurance 528 598private medical insurance 506 652derivatives 350 233including complaints about● spread-betting 219 191personal accident insurance 304 274total number of new cases 206,121 163,012Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: insurance39Complaints about insurance made up 61% ofthe total number of new cases we received duringthe year (42% in the previous year). The numberof new cases relating to insurance increased by82% – from 69,034 in 2009/2010 to 125,575in 2010/2011.This increase largely resulted from the further113% rise in the number of complaints aboutpayment protection insurance (PPI) – from49,196 in 2009/2010 to 104,597 in 2010/2011– following a 58% rise in the previous year. Thisis the largest number of complaints we have everreceived in a year about a single financial product.We also saw a 27% increase in complaintsrelating to travel insurance and a 6% increasein complaints about motor policies. However,the number of complaints we received duringthe year about health and medical insurancefell by 13% and complaints about contentsinsurance dropped by 9%.The chart below shows how these insurancecomplaints were spread across differentproducts and services.83%payment protection insurance (PPI)4.5%motor3%2%buildingstravelinsurance1.5%contents1.5%health and medical insurance1%extended warranty1%commercial and business protection2.5%other (including legal expenses, pet and roadside assistance)Annual Review 2010 | 2011

40Financial Ombudsman Servicewhat the complaints were about: insurancepayment protection insurance (PPI)2011 104,5972010 49,1962009 31,0662008 10,6522007 1,832annual trend:+113%2006 1,315year ended 31 MarchIn last year’s annual review we reported a 58%increase in the volume of complaints referred tous about payment protection insurance (PPI). Wealso said we hoped that the regulator’s proposalsin relation to the handling of PPI complaintswould be finalised as soon as possible – and thatthe improved complaints-handling processessubsequently put in place by businesses wouldresult in a significant reduction in the volume ofPPI complaints referred to the ombudsman serviceover the following year.Unfortunately, the year did not turn out that way.In August 2010 the Financial Services Authority(FSA) introduced new complaints-handlingguidance (its policy statement 10/12) about theassessment and redress of PPI complaints. Somebusinesses started to implement this guidancebut a number of high-street banks decided tochallenge it.This meant that these banks started to issuestandard letters to customers from autumn 2010,saying they were unable to decide PPI complaintswhile legal action was ongoing. This legal actiontook the form of a judicial review brought by theBritish Bankers Association (BBA) – on behalf of anumber of high-street banks – against the FSA andthe ombudsman service.The judicial review took place in the High Court atthe end of January 2011. It involved a challengeto the introduction of the FSA’s guidance andto parts of the online technical resource on ourwebsite. Judgment was handed down by the HighCourt at the end of April 2011 – endorsing ourapproach, and that of the FSA, to handling PPIcomplaints. Just as this annual review was goingto print, the BBA announced that it did not intendto appeal this judgment.While awaiting the outcome, the banks that werechallenging us stopped responding substantivelyto many thousands of complaints. Regrettably thisled to delays and uncertainties for the consumersin these cases. In most PPI disputes, there isnot just one single question that determines theoutcome of the complaint. There are often manyissues involved. The way the policy was sold –and whether it was appropriate for the consumer– will be a matter of judgement in the individualcircumstances of the case.While the legal challenge against us has beenongoing, the volume of PPI complaints has soared– with up to 5,000 new cases being referred tous each week by March 2011. This meant thatin the financial year 2010/2011 we received arecord 104,597 PPI cases – a 113% year-on-yearincrease. This is the largest number of complaintswe have ever received in a year about a singlefinancial product.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: insurance41The FSA wrote to trade associations in January2011 to remind them of the regulatory obligationson businesses in handling consumers’ complaints,while awaiting the outcome of the legal challenge.We hope that this will result in improvements inthe way businesses ensure they are complyingwith the relevant complaints-handling rules.At the end of March 2010 we introduced newstandard documentation for PPI disputes, toencourage more efficient, co-ordinated andconsistent complaints-handling processes acrossthe financial services industry and by claimsmanagementcompanies. We have receivedpositive feedback about these new complaintforms and how they can help the complaintshandlingprocess.However, during the year some claims-managementcompanies began to take a disappointingly laxapproach to completing the questionnaire onbehalf of consumers. Where a form is completedinaccurately, or not at all, we may not be ableto progress the complaint. We have madeour position on this very clear to the claimsmanagementcompanies in question.The quality of the information provided by claimsmanagementcompanies to support their clients’cases varies enormously. Some provide clear andcogent arguments on behalf of the consumer.Others simply make general allegations, some ofwhich have no relevance to the individual dispute.These same points can sometimes also bemade about the information provided by financialbusinesses in the PPI complaints we see.Too often, the true facts of a case are adequatelyaddressed only when the dispute is referredto the ombudsman service.This can be frustrating and time-consuming.It does not help the parties in resolving thedispute fairly and as quickly as possible– which must be in everyone’s interests.During the year we also saw a small but growingnumber of cases where, after investigation, itemerged that no PPI policy had ever been inplace. It is essential that businesses and claimsmanagementcompanies make every effort tocheck this, before the matter is referred to theombudsman service.Where there is a dispute as to whether or not aPPI policy actually existed, it will help us resolvematters more quickly if the business or theconsumer can provide strong supporting evidence– for example, by providing a copy of the relevantloan agreement or credit card statements. If eitherthe business or the claims-management companyappears to be acting unreasonably, we will referthese matters to the relevant regulator.Annual Review 2010 | 2011

42Financial Ombudsman Servicewhat the complaints were about: insurancemotor insurance complaints2011 5,7842010 5,4512009 6,2672008 6,009annual trend:+6%2007 4,2302006 3,372year ended 31 MarchAfter a substantial decline in the number of casesinvolving motor insurance in the previous year,complaints in the financial year 2010/2011 roseslightly – by 6%.However, we were pleased to see fewer disputesabout the approach insurers adopt to valuingvehicles that had been written-off – and toinvestigating complaints about the quality ortimeliness of repairs to vehicles. We believe thisreduction reflects the constructive discussionswe have had over the year with individual motorinsurers and the Association of British Insurers(ABI), so that they better understand our longstandinggeneral approach in these areas.But some cases we see still show disappointingpractice. Despite the publication in 2009 of ouronline technical note on vehicle valuation, wecontinue to see some insurers making offers totheir customers that they should know are lowerthan they ought to be.We also continue to uphold consumers’complaints about the thoroughness of insurers’investigations in relation to claims for stolenvehicles. In complaints we see, motor insurersoften decline theft claims that they view assuspicious, without carrying out a properinvestigation – for example, not pursuing obviouslines of enquiry about missing keys etc. We oftensee insurers failing to give clear reasons forrejecting this type of claim – and not appearingto consider other possibilities for the theft.If the insurer has carried out a thoroughinvestigation, which indicates that the theftwas unlikely to have occurred as the consumerclaimed, we may support the insurer – or decidethat the matter is better dealt with in court, whereevidence can be given under oath and witnessescross-examined.However, the insurer cannot expect us to agreewith them if they are relying simply on suspicionrather than on actual evidence. In these cases,we are likely to consider it reasonable to expectthe consumer to have been interviewed,the vehicle to have been inspected and a reportto have been obtained from security experts,where appropriate.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: insurance43complaints about buildings and contents insurancebuildings insurancecontents insurance2011 3,469 1,6972010 3,437 1,8632009 3,447 1,6712008 2,669 1,3632007 1,951 1,2382006 1,951 1,224year ended 31 Marchannual trend:annual trend:+1% -9%During the year the overall number of complaintsreferred to the ombudsman service abouthousehold insurance (covering buildings andcontents) fell by 2.5%.The disputes we saw continued to cover a fullrange of issues, including claims relating tosubsidence, floods, storm and fire damage, aswell as theft and accidental damage. The mostcommon cause of disputes continued to be therefusal of insurers to pay a claim.However, complaints about the quality andtimeliness of repairs also remained a significantpart of our work in this area. Where insurershave chosen to repair damage under the termsof a policy, they should bear in mind that theywill be responsible if those repairs are not ofadequate quality. In cases we have seen, this hassometimes been unclear – and we have been leftto interpret the position and work out who exactlyis responsible for the repair.We have also seen cases where there has beeninconsistency around this issue – for example,where the consumer appointed the builder butthe insurer then instructed the builder what to do.We can see in some cases that the insurerwas simply trying to be helpful – but this canoccasionally backfire on them.It is sometimes said that the number of fraudulentinsurance claims – relating both to householdand motor policies – increases in recessionarytimes when money is tight. We have seen nodirect evidence of this in the cases we havedealt with during the year. In our experience,disputes are less likely to arise where insurersinvestigate claims thoroughly and give consumersa proper opportunity to explain any apparentinconsistencies.During the year we have seen an increase in thenumber of cases where entrenched attitudeson both sides – and a refusal by either party toconciliate or compromise – has led to a significantrise in the number of cases being referred to anombudsman for a final decision. This may reflectthe tougher economic times – and the amount ofmoney at stake for the consumer.However, we are disappointed to see someinsurers challenging our views and requestingformal ombudsman decisions in areas whereAnnual Review 2010 | 2011

44Financial Ombudsman Servicewhat the complaints were about: insuranceour approach is long-established – for instance,where household insurance disputes involve flooddamage, unoccupied buildings, and matchingsets of furniture or fittings. In cases wherethis happens, we invite the insurer to makerepresentations in the particular case. But wherethe ombudsman’s overall approach has beenthe same for more than twenty years, the insurer’sarguments need to be very persuasive in theparticular circumstances.travel insurance complaints2011 2,5362010 2,0032009 1,9732008 1,628annual trend:+27%2007 1,6702006 1,787year ended 31 MarchThe number of travel insurance complaintsreferred to the ombudsman service during theyear increased significantly – rising by 27%.The cases we received included complaintsarising from delays and disruption causedby ash from a volcanic eruption in Iceland.Given the scale of the problems this caused – withflights grounded across Europe for several weeksin some cases – the number of complaints we saw(around 700 cases) was significantly lower thansome had expected. However, these cases raisedimportant issues for the travel insurance sector.As we have commented in previous annualreviews, travel policies probably remain the leastwell-explained and understood of the types ofinsurance that consumers are most likely to buy.The insurance is often bought at the same timeas a holiday. Attention is usually more focused onholiday arrangements than on what would happenif the consumer needed to claim for medical cover,delay or cancellation. In the cases we see, fewconsumers took time to read the policy to ensureit really met their needs. So there can be someunpleasant surprises if claims are made.Almost all the cases we see relating to travelinsurance involve disputes over the paymentof claims. The extension of our remit in January2009, to enable us to look at complaints about thesale of travel insurance sold alongside a holiday orother travel, has resulted in only a small – thoughincreasing – number of complaints.Complaints about being mis-sold a travel policyoften arise in the context of the “non-disclosure”of consumers’ pre-existing medical conditions.Requiring consumers to speak to a medicalhelpline when buying insurance has led towelcome improvements in this area. But it hasnot solved all potential problems.From the recordings of conversations that welisten to between consumers and insurancehelplines – as part of our work resolving travelinsurance disputes – it is clear that consumers canbe greatly helped on issues involving pre-existingconditions, where there are adequate numbers ofsuitably qualified staff on the helpline.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: insurance45However, we also listen to recordings of phoneconversations where helpline staff have clearly notfollowed the script. In other cases, helpline staffhave focused solely on the lead traveller, withoutasking questions about other fellow travellerswhose health might also affect the insurancecover. And we continue to see cases where thedispute turns on the “non-disclosure” of healthissues relating to family members who were nottravelling themselves – but whose ill health ordeath subsequently affected the plans of thosewho were travelling.In the cases we see, we frequently come acrosstravel policies where the information provided tothe consumer is poor, compared with the standardsof information in other types of policy. Thesemay be relatively low-premium policies – but theconsequences for a consumer of a travel claimbeing rejected can be catastrophic in some cases.health and medical insurance complaints2011 1,7542010 2,0262009 1,8742008 1,839annual trend:-13%2007 1,9592006 2,291year ended 31 MarchThe number of complaints we received aboutincome protection, critical illness and privatemedical insurance all fell during the year –by 7%, 12% and 22% respectively.We are pleased that some health and protectioninsurers continue to learn from complaints –and are committed to resolving complaints atthe earliest stages, so that they do not have tobe referred to us. We welcome dialogue withinsurers to explain our approach and prevent theescalation of complaints generally.Complaint numbers in this area may not be ashigh as they are in relation to some otherinsurance products. However, they are likely toinvolve consumers who are ill, bereaved or inother distressing circumstances. This is why wehave a specialist team working on these cases,who are trained to handle these sensitive situations.Specifically, we continue to see difficult casesinvolving people claiming insurance benefitswhen they are unable to work, either temporarilyor permanently. These cases raise complexissues, particularly when the disability stemsfrom problems in the workplace. Invariably thesecases involve financial hardship.Annual Review 2010 | 2011

46Financial Ombudsman Servicewhat the complaints were about: banking and creditComplaints about banking and credit madeup 31.5% of the total number of new cases wereceived during the year (44% in the previousyear). The number of new cases relating tobanking and credit decreased by 9% – from71,700 cases in the financial year 2009/2010 to65,063 in the financial year 2010/2011.This chart shows how these banking and creditcomplaints were spread across different productsand services.bankingand creditcurrent account complaintsIn last year’s annual review we commented on thenumber of complaints from consumers who toldus that their current-account problems related tofinancial hardship they were experiencing. Duringthe year we continued to receive steady numbersof complaints involving hardship – 9,713 in total.These cases often involved consumers sayingthat charges applied to their current accounts hadadded to the problem.Current-account providers must deal fairly withconsumers in financial difficulty – though what isfair will depend on the individual circumstancesof the case. In the complaints we see, reachingagreement on what type of help is appropriate incases of financial difficulties is often made morechallenging by the high expectations on both sides.In many cases, the consumer (or their representative)will see a refund of charges and/or writing-off adebt as a basic requirement for a fair outcome.The current-account provider, on the other hand,may see the first step towards resolving theproblem fairly as the consumer offering to makea substantial repayment of their debt.30.5%27%11%11%9%7.5%4%current accountscredit cardsconsumer-credit products and services*mortgagesunsecured loanssavings accountsother banking servicesOur approach to achieving a fair outcome incases like this will normally involve one or moreof a range of practical measures, reflecting theconsumer’s circumstances and means.These measures might include, for example,re-arranging long-term overdraft debt to moremanageable terms, and reviewing the timingsand amounts of direct debits, to break the cycleof unauthorised overdraft borrowing.During the year our work in many cases has beenhindered by the superficial approach to complaintshandling taken by some current-account providers– who have often applied inflexible internalprocesses and rigid measures, regardless of theindividual circumstances of each case.* (eg hire purchase, credit broking and catalogue shopping)Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: banking and credit47current account complaints (continued)2011 19,9442010 25,2522009 13,6822008 39,263annual trend:-21%2007 8,0612006 3,543year ended 31 MarchOur work resolving disputes has also beenmade harder by the reluctance of some claimsmanagementcompanies – acting on behalfof consumers – to provide us with the levelof information we needed (or with any properinformation at all, in some cases). There is moreinformation about claims-management companieson page 29.Consumers (and their representatives) can helpby telling us what has triggered the problem andwhat they have already told their current-accountprovider about their circumstances. Currentaccountproviders can help by telling us what helpthey have already offered the consumer, and whythey believe that is enough in the circumstances.Complaints about disputed plastic-cardtransactions relating to current accounts continuedto form a significant part of our workload thisyear. These disputes involved transactions atcash machines and at point-of-sale machinesat retail outlets, clubs and bars. The outcomesof complaints like this continue (as mentionedon page 48 in relation to disputed credit cardtransactions) to turn mainly on practical issuesrelating to the particular facts of the case, ratherthan on specialist technical issues.In some of the cases we have seen, the currentaccountprovider has failed properly to take intoaccount the rules relating to disputed withdrawalsmade from overdraft facilities – which the lawtreats differently from disputed withdrawalsmade from money in a current account.Given the varying quality and accuracy ofinformation on this topic, it is not surprising thatsome consumers find it difficult to understandwhat the rules about disputed transactions requireboth from financial businesses and consumers.We have also seen a number of complaints thisyear about powers of attorney given by olderconsumers to others to act on their behalf.Many of these complaints suggest that somebank-branch employees struggle to understandthe process and significance of different typesof powers of attorney.In particular, these employees mayinappropriately ask for proof of the customer’smental capacity – or insist that the consumercompletes or signs detailed paperwork, eventhough they have already given and registereda lasting power of attorney, allowing someoneto deal with their finances for them. In extremecases, the account may have been wrongly“frozen” because of lack of understanding aboutthe effect of the particular type of power ofattorney produced.Similarly, we have seen some complaints aboutproblems encountered by people who are legallyentitled to act for consumers with learningdifficulties – and have found that their bankis reluctant to provide certain services on theaccount, such as online or phone access. From thecomplaints we have seen, these problems appearto stem from inflexible procedures at branch level,rather than from “head office” policy.Annual Review 2010 | 2011

48Financial Ombudsman Servicewhat the complaints were about: banking and creditcredit card complaints2011 17,4662010 18,3962009 18,5902008 14,123annual trend:-5%2007 2,7312006 2,124year ended 31 MarchThe number of complaints we received during theyear about credit cards reduced slightly – but stillremained at a high level.A substantial number of these cases continuedto involve disputes relating to section 75 of theConsumer Credit Act 1974 – under which the creditcardprovider can be jointly liable with the supplierof the goods or services, if a consumer has a validclaim for misrepresentation or breach of contract.Cases involving claims under section 75 includeda wide range of transactions for the purchaseof goods and services as diverse as homeextensions, small business franchises, jewelleryand motor vehicles.We continued to see complaints from consumerswho had used their credit cards to buy membershipof “holiday clubs” – where they considered thatthe benefits of membership had proved to be lessvaluable than they had expected.As we reported last year, in many of these caseswe found that the business said by the consumerto have breached the contract – or made themisrepresentation – did not have the necessarylegal connection to the business that actuallyreceived the credit-card payment. This means thatsection 75 cannot apply – so there could never bea successful complaint against the lender.We also saw a number of complaints aboutspecial credit-card “deals” – relating, for example,to interest-free or low-interest periods – thatcame to an end because the consumer missed,or was late with, a monthly repayment. We haveoften been able to arrive at informal settlementsin these types of complaints – usually where theconsumer is experiencing financial difficulty –with the lender agreeing a compromise solution,even though the contractual position was clear.As in previous years, we saw a significant numberof complaints involving so-called “defaultcharges” on credit cards – which consumershave to pay if they miss a payment, make a latepayment, or exceed their credit limit.Complaints about disputed credit-cardtransactions continue to form part of our work,although the number of these cases has remainedstable. These cases turn on practical issuesrelating to the individual facts and circumstancesinvolved – and sometimes to the relevant law –rather than to any sophisticated technical issues.We have seen fewer complaints this year aboutinterest-rate changes on credit-card accounts –where the card issuer said the increase was“risk-based”, to reflect market conditions. Inthe cases we see, consumers do not readilyunderstand – given the historically-low Bank ofEngland base rate – why the interest rate they arepaying needs to increase. Card issuers have notalways explained this issue well – or at all – incases we have dealt with.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: banking and credit49The “opt-out” that credit-card issuers offer toconsumers who do not wish to continue with ahigher rate of interest was widened during theyear – to cover all interest rate increases (and notjust those that relate to “risk-based” re-pricing).This should mean that the number of complaintswe see about this issue will continue to reduce –particularly if card issuers give clear explanationsfor their reasons for increasing interest rates.complaints about consumer credit2011 7,2502010 6,3292009 3,0142008 849annual trend:+15%year ended 31 MarchThe number of complaints we received aboutconsumer-credit products and activities increasedsignificantly again during the year.This means that our caseload in this area has grownalmost nine-fold since the financial year 2007/2008.That was when the range of credit-related complaintswe cover was extended by law beyond loans andcredit cards provided just by banks and buildingsocieties – which have been under our remitsince we were first set up. Since 2007/2008 ourjurisdiction has covered a wide range of otherbusinesses involved in consumer credit, includingloan firms, hire-purchase operators, debt collectorsand catalogue-shopping companies.During the year we continued to receivecomplaints about fee-charging “debtmanagement”businesses. These businessesundertake to liaise with the creditors of consumerswho have problem debt, agreeing repaymentarrangements and administering the monthlypayments on the consumer’s behalf.We also saw complaints about delays and pooradministration by debt-management businesseswhen passing on payments to creditors –sometimes resulting in a significant worsening ofthe consumer’s financial position, including courtjudgments obtained by creditors who had notreceived their payments.We also started to see complaints about debtmanagementbusinesses offering to act on theconsumer’s behalf in making a claim againsttheir creditors that their credit agreementswere “unenforceable at law”. Again, consumerscomplained to us that these businesses hadnot been clear about what they were promisingto do and what it would cost.In last year’s annual review we wrote aboutcomplaints relating to credit broking – usuallyinvolving the credit-broking business taking anup-front fee for arranging consumer credit that itsaid was already sourced or agreed at a particularrate, but was never actually provided.In the cases we saw, consumers complainedabout poor explanations and lack of clarity asto what they were signing up for – leading tounexpected charges and disappointment whenthe debt-management plan did not achieve whatthe consumer had expected.Annual Review 2010 | 2011

50Financial Ombudsman Servicewhat the complaints were about: banking and creditWe have continued to see complaints about thisduring the year – resulting in complaints aboutcredit broking more than doubling in number to697 cases. In some of these cases, the creditbrokingbusinesses complained about hadalready gone out of business – which meant thatconsumers had no way of getting their moneyback, even if we upheld their complaint.We also saw a significant increase during the year– of 59% – in the number of complaints aboutpoint-of-sale loans that consumers had taken outto pay for goods or service – particularly trainingcourses and holiday-club memberships. These areloans arranged through the provider of the goodsor services – and can be used only to finance aspecific purchase.The money borrowed on the loan is paid out bythe lender direct to the provider of the goods orservices. Because of the underlying arrangementsbetween the lender and the provider of the goodsor services, the consumer may potentially have aclaim against the lender under section 75 of theConsumer Credit Act 1974, if there is a problemwith the purchase.In cases we saw during the year involving pointof-saleloans, consumers often complained abouttraining courses that they believed had not beenprovided in accordance with what they wereentitled to under the contract. In some of thesecases, the original trainer had gone out of businessand the consumer had been offered a substitute.Similarly, consumers also complained aboutholiday-club memberships that had not lived upto what they said they had been told, before theysigned up, by the person selling them.We upheld many – though not all – of thecomplaints we received about training courses.We were more likely to do so where a substitutecourse lacked a feature that was of importance tothe consumer – or where we were satisfied thatthe provision of training at a specific time hadbeen essential for the consumer.The outcomes of complaints about holiday-clubmemberships were more varied. This was becausein many cases we discovered that the businesssaid by the consumer to have misled them didnot have the necessary legal connection to thebusiness that actually received the funds from theloan. This means that section 75 cannot apply –so there could never be a successful complaintagainst the lender.We also received complaints during the year aboutthe quality of motor vehicles – both new andused – bought using point-of-sale loans or hirepurchase agreements. When we consider thesetypes of complaints, we take account of evidenceprovided by the consumer and the business – tohelp us reach a view on whether the vehicle wasof a reasonable standard. We do this in much thesame way as a court would do.In cases like this during the year, we often foundthat the lender or hire purchase business hadsimply relied on assurances from the dealer aboutthe condition of the vehicle – rather than takingany real steps to satisfy itself as to whether theconsumer had a valid complaint.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: banking and credit51complaints about mortgages2011 7,0672010 7,4692009 7,6022008 6,824annual trend:-5.5%2007 4,3662006 3,942year ended 31 MarchThe number of mortgage-related complaints wereceived fell slightly during the year – continuingthe downward trend started in the previous year.The cases continued to involve the same typesof issues – and broadly reflect the economy andthe state of the mortgage market as a whole.Administrative errors remained the largest areaof complaint.We also saw an increase in the number ofcomplaints from consumers whose applications to“port” their residential mortgage (in other words– transfer it to a new property) had been declined.In the cases we see, this often happens where –because of the tougher mortgage market in recentyears – the lender has tightened their lendingcriteria, resulting in the consumer no longermeeting the required criteria.It is unusual to see mortgage contracts that allowthe consumer unconditionally to “port” theirmortgage as a contractual right. Lenders vary inthe flexibility they offer to consumers wantingto move and we do not set the lending criteriaapplied by mortgage lenders. But we can look atwhether the lender has treated its customer fairly.In our experience, it is helpful if a decision onlending is clearly communicated and explained –so that the consumer can understand why they donot qualify to “port” their loan.In some cases, where the individual circumstanceswarrant it, we may decide that a fair outcome is forthe lender to waive an early repayment charge –rather than allowing the loan to be “ported”.We have also seen complaints during the yearwhere the dispute involves the decision by a lenderto significantly reduce the upper age-limit applyingto the term of a mortgage – or to require theconsumer to provide proof of retirement income.Complaints about mortgage interest rates wereless of an issue during the year. This probablyreflected the low Bank of England base rate andthe fact that, as fixed-rate mortgage productscome to an end, some consumers were benefitingfrom historically-low variable rates.The number of complaints about the handling ofarrears remained at a similar level to the previousyear. However, we continued to see a significantnumber of complaints about arrears chargesapplied by some lenders – and about lendersbeing inflexible, particularly when the consumer’scircumstances or proposals did not fall into anyof the standard categories forming part of theirlender’s normal approach.Cases involving repossession remained a smallpart of our work. However, they continued to raisedifficult and sensitive issues. A common theme wasthe lack of effective communication from the lender,once the property had been taken into possession.Annual Review 2010 | 2011

52Financial Ombudsman Servicewhat the complaints were about: banking and creditThe cases we dealt with involving repossessionalso frequently included complaints about delays– including delay in passing on surplus fundsto other lenders who had legal charges over theproperty, and delay in providing the consumerwith a final statement detailing the costs andexpenses the lender had applied to the debt.We also saw complaints about delays by thelender in confirming whether they intendedto ask the consumer to pay any debt relatingto shortfalls on the mortgage.complaints about unsecured loans2011 5,8202010 6,2852009 4,2422008 2,940annual trend:-7.5%2007 1,7552006 1,507year ended 31 MarchFollowing substantial year-on-year increases inthe number of complaints referred to us aboutunsecured loans, this year we saw a dip in thesecases for the first time.As in previous years, many of the complaintswere from consumers who were experiencingfinancial difficulty and did not feel their lendershad treated them fairly. In these cases,some lenders still relied on inflexible standardapproaches when responding to cases offinancial difficulty. This contrasted with ourusual approach – which involves taking intoaccount the consumer’s individual circumstances,when assessing what would be fair treatmentfor them.We continued to see some cases whereconsumers argued that their loan agreementwas “unenforceable at law” – often based onwrong or misleading information on theinternet and from other sources.As the ombudsman service is not a court of law,we have no power to declare a loan agreement“unenforceable”. And the remedy that many ofthese consumers sought – that we should directthe lender to write off the debt – would not, in anycase, generally be available to them under the law.We also received complaints about the rates ofinterest that lenders were applying to variable-rateloans – which consumers found confusingly highwhen compared with the historically-low Bank ofEngland base rate. In many of these complaints,the consumers felt that their lender had seemedunable (or unwilling) to explain the high interestrate in a way that made sense to them – and thatalso persuaded them that the lender had takenproper account of the loan’s terms and conditions.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: banking and credit53complaints about savings accounts2011 4,7832010 5,0332009 5,1832008 2,675annual trend:-5%2007 1,4382006 1,233year ended 31 MarchThe number of complaints about savingsaccounts fell slightly again in the financial year2010/2011– continuing the downward trend ofthe previous year.Most consumers who complained to uswere concerned about problems with pooradministration by some savings-account providers– in particular, delays in opening accounts and intransferring balances between providers.From 2011 there is a new maximum time limit of15 working days for transfers of individual savingsaccounts (ISAs). This may reduce problems in thisarea – although not all the complaints we receivedabout delay involved ISAs.We received a number of complaints fromconsumers who had not realised how much theinterest rate on their savings accounts had gonedown – until they received their annual interestpayment and compared it with previous years’payments. Because of the timing and amountof the reductions over a period of time, theseconsumers had not been entitled to receivepersonal notification of the interest-rate changesin question – so had not fully appreciated whathad happened.Consumers also complained to us in cases wherethey felt savings-account providers had not giventhem clear enough information on the “cut-off”date for opening fixed-rate products – and on howlong they had after that date to put the maximumamount of money allowed into their account.As consumers are only allowed to open one ISAaccount in each tax year, clarity about this isparticularly important.Annual Review 2010 | 2011

54Financial Ombudsman Servicewhat the complaints were about: banking and creditcomplaints about other banking services2011 2,7332010 2,9872009 2,7252008 2,643annual trend:-8.5%2007 1,7482006 1,360year ended 31 MarchIn last year’s annual review we mentioned thefaster payments service for payments over theinternet and by phone. Introduced in the bankingsector in 2008, this new faster process continuesto reduce the number of complaints we see aboutdelays in payments getting through the system.However, we have started to see more complaintsabout payments that have been “misapplied”because of a mistake by the person sendingthe money (for example, entering the wrongaccount number on a transfer form or in anonline transaction).Where a consumer makes an error in theaccount number of the intended recipient,the bank receiving the payment will use thatincorrect number – and not the recipient’sname – to allocate the payment.In some cases, usually where the payment hasbeen made using internet banking, we havedecided that the bank could have given a clearerand more prominent warning that it would relyon the account number and not the name.We continued to receive a steady stream ofcomplaints involving international moneytransfers. As in previous years, the complaintswe saw related to costs, delays and currencyproblems. In particular, consumers werefrequently uncertain about how the costs of thetransfer would be apportioned.In last year’s annual review we mentionedcomplaints where consumers – often students –had been duped into drawing money from theiraccounts in return for a cheque that turned outto be fraudulent.This year we saw a variant on this – with theconsumer receiving money into their accountthrough online banking and transferring itstraight away to the fraudster. This money laterturns out to have been paid from the accountof an earlier victim of the fraudster. When thefraud is discovered and the money is clawedback by the initial victim, the second victimis left out of pocket.From the complaints we have seen like this, manyconsumers do not fully realise that it is just asimportant to be certain about the origin of moneypaid into their account electronically as it is to bevigilant about cheques that they are given.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: investments and pensions5521.5%whole-of-life policies andsavings endowments20%mortgage endowmentsinvestmentsand pensions9%7.5%personal pension plansportfolio management7%stockbroking5.5%unit-linked bondsComplaints about investments and pensionsmade up 7.5% of the total number of new caseswe received during the year (14% in the previousyear). We received 15,483 investment andpension-related cases – 30% fewer than in theprevious year.We saw a fall in the number of investmentrelatedcomplaints across almost all productareas. The largest drop was in the number ofmortgage endowment complaints – which fellby a further 44%.For the first year since we were set up, mortgageendowments are no longer the most complainedaboutinvestment product. From a peak of 69,737cases in 2004/2005 – accounting for 63% ofall cases we received that year – we receivedjust 3,048 mortgage endowment complaintsin 2010/2011 (representing only 1.5% ofour workload).5.5%4.5%3.5%3%2.5%2.5%2%1%1%investment ISAs“with-profits” bonds“structured” productssmall self-administered schemes (SSASs) andself-invested personal pensions (SIPPs)guaranteed-income bondsannuitiesderivatives (including spread-betting)unit trustsSERPs4%other productsAnnual Review 2010 | 2011

56Financial Ombudsman Servicewhat the complaints were about: investments and pensionscomplaints about investment-linked products2011 3,7842010 6,3292009 5,7982008 2,750annual trend:- 40%2007 3,6442006 5,810year ended 31 MarchAs we have commented in previous annualreviews, periods of market volatility tend toresult in increased numbers of complaintsreferred to us about the mis-sale of investments,where the product concerned may be too riskyfor the consumer.We do not usually, of course, deal withcomplaints that are just about the performanceof any investment.So the fact that the number of new complaintsabout investment-linked products fell significantlyduring the year doubtless reflected the generallyimproved performance of the financial markets.Instead, our investment workload this year hasbeen marked by long-running disputes stemmingfrom the poor market conditions in earlier years.These cases frequently involved major financialinstitutions – and the disputes have been fiercelycontested.For example, we dealt with several hundredcomplaints against a major high-street business– which involved medium- and high-risk productsbeing mis-described and inappropriately soldto consumers. Despite receiving final decisionson the key issues, the business resisted settlingindividual cases without the direct interventionof an ombudsman. Although the business did,eventually, agree to deal with the remaining caseson the same basis that the ombudsman haddirected, it was disappointing that consumerswere both delayed and inconvenienced.Other disputes we have seen this year have alsobeen characterised by the businesses involvedtaking entrenched positions – and showingreluctance to accept what appeared to us to beclear evidence of mis-selling. This is reflected inthe increased proportion of complaints involvinginvestment bonds which we upheld in favour ofthe consumer. This figure rose to 60% during theyear (see page 67).Another high-street financial services businesssold large numbers of a complex investmentproduct to investors in its local branches. Wefound it unlikely that many of these consumerswould have made these investments, if they hadunderstood the nature of the product – which waslater described by the regulator as unsuitable forretail investors.The business produced “expert evidence” thatthe risk was mitigated by certain factors.We considered this evidence carefully but werenot persuaded to change our initial view.Consumers whose financial experience hadpreviously extended only to deposits and savingsdid not seem to us to be likely customers foresoteric investment products.The evidence here of businesses taking a morelegalistic approach to consumer complaints isdisappointing. We refer to this elsewhere in thisannual review (see page 63). The ombudsmanprovides an alternative to the courts in dealingwith consumer complaints.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: investments and pensions57We want to resolve disputes without mattersbecoming deeply adversarial and entrenched.Other financial businesses have taken a morepragmatic view and have worked with usconstructively at the earlier stages of ourcomplaints process, to resolve complaintswithout requiring their customers to await afinal decision from an ombudsman.During the year we continued to receivecomplaints about the make-up and descriptionof investment funds. Consumers continued tocomplain to us that the description of some fundsas “cautious” failed to reflect the real risksinvolved. In particular, consumers complainedabout the use of the word “cash” as a descriptionof a fund, since they felt this implied a safedeposit, with no appreciable risk to capital.Risk is at the heart of most investment complaintswe see. So we are pleased that this issue is nowbeing considered more widely by the regulatorand trade associations. Recognising thatconsumers may put a literal interpretation on aword like “cautious” is a useful – and perhapsoverdue – step towards applying terminology thatcannot be misunderstood.complaints about whole-of-life policies and savings endowments2011 3,3282010 4,1992009 3,5152008 3,211annual trend:-21%2007 3,7342006 4,163year ended 31 MarchCases referred to the ombudsman service duringthe year about whole-of-life policies continued toinclude complaints about reviews of “reviewable”whole-of-life policies – where the originalassumptions (particularly in relation to investmentreturns) had not been met, resulting in eithera reduction in the consumer’s life cover or anincrease in their premiums.As with all investment products, we frequentlysee complaints about the level of risk in relationto the funds chosen to support the life cover– as well as complaints that the policy was notsuitable for the consumer in their particularcircumstances. We also continue to seecomplaints about businesses failing to carryout reviews at the correct time.In these cases a key consideration is theprominence of information given to consumers atthe outset – warning that this type of policy wouldbe subject to review and explaining what thiscould mean for the consumer.Where we uphold complaints in relation towhole-of-life policies, the redress can rangefrom our directing the business involved torefund premiums paid by the consumer (with orwithout a deduction for life cover) to telling thebusiness to provide guaranteed cover (or coveron another basis).Annual Review 2010 | 2011

58Financial Ombudsman Servicewhat the complaints were about: investments and pensionsDuring the year we continued to receive a steadystream of complaints from consumers who weredisappointed with the returns on their savingsendowment plans – and who told us they hadexpected a better return from these products thanthey would have received from a deposit account.As we have commented in previous annualreviews, savings endowment plans can beinflexible products that may need to be held formany years before they produce a worthwhilereturn. So in looking at complaints about theseplans, we do not usually consider them suitablefor people such as those approaching retirement,who have a limited “time horizon” for investing.complaints about mortgage endowments2011 3,0482010 5,4002009 5,7982008 13,778annual trend:- 44%2007 46,1342006 69,149year ended 31 MarchIn last year’s annual review we reported that thenumber of mortgage endowment complaints hadcontinued to fall, albeit at a much gentler pacethan in previous years.During the financial year 2010/2011 we saw afurther fall, with new cases slowing downto a rate of fewer than 60 each week. At the peakof complaints about mortgage endowments,in 2005, we were receiving up to 1,500 casesa week. So the current volumes are very low bycomparison and now represent just 1.5% of ouroverall workload – from a peak of 63% of ourworkload in 2005.However, mortgage endowments still remainone of the most complained-about investmentproducts. And for many people referringcomplaints to us, the real difficulties caused bymortgage “shortfalls” are now starting to bite –as endowment policies they took out in themid- to late 1980s, to repay their mortgage,are now maturing.The majority of complaints about mortgageendowments where the time limits for complaininghave not yet expired – and which we are thereforeable to assess – continue to centre around therisks of the policy. This involves our deciding –in each individual case – whether the financialbusiness did enough to help the consumerunderstand the risk that the policy might notperform well enough to pay off the mortgage.Very large numbers of consumers have taken actionover the last decade to deal with any potentialshortfall when their endowment policy matures.This has included making complaints – and beingpaid compensation where appropriate. But westill continue to see complaints from consumerswho are confused and disappointed when theirendowment policy matures with a shortfall.Annual Review 2010 | 2011

Financial Ombudsman Servicewhat the complaints were about: investments and pensions59In last year’s annual review we highlightedcomplaints about the information that businessesgive consumers when their policy is close tomaturity. During the year we continued to seecomplaints where consumers say they wereconfused by this information.complaints about pensions2011 2,7062010 3,5942009 4,8252008 5,297annual trend:-25%2007 3,6872006 4,053year ended 31 MarchThe number of complaints we received aboutpensions during the year continued the recentdownward trend – and fell by a further 25%.However, these cases often involve a number ofcomplex issues with potentially large amounts atstake. The consumers involved tend to be moresophisticated and the businesses more specialist– with both sides usually putting forward highlytechnical arguments.Where we uphold a pension-related complaint,putting matters right is generally not easy– with tax implications and restrictions onpaying money into pensions to be takeninto consideration. All this means that thesecomplaints can be among the most difficultand time-consuming disputes we deal with.Cases involving pensions also frequently havemore than £100,000 at stake – the maximumamount of compensation we can tell a businessto pay. Businesses may agree to settle anyrecommendation we may make above this level– but the recommendation itself is not legallybinding on them.A High Court case decided during the year hasclarified that once an ombudsman’s decision hasbeen accepted, the case cannot then be taken to courtin relation to any amount above £100,000. Separatelyduring the year, the FSA consulted on raising from£100,000 to £150,000 the maximum amount ofcompensation we can tell a business to pay.The range of pension-related complaints we dealtwith during the year was very wide, involving manydifferent issues. During the year we continuedto see complaints about advice on selectinginvestments within a pension fund; delays insetting up annuities; taking pension benefitsusing income draw-down (sometimes known asunsecured pension or pension fund withdrawal);and “switching” (transferring pension funds fromone policy to another), particularly into selfinvestedpersonal pensions (SIPPs).Annual Review 2010 | 2011

60Financial Ombudsman Servicewhat the complaints what the were complaints about: investments were about and pensionscomplaints about stockbroking and portfolio management2011 2,2672010 2,4742009 2,0782008 1,209annual trend:-8%2007 1,0522006 975year ended 31 MarchIn last year’s annual review we reported asignificant number of complaints about highpressureselling by a number of stockbroking firms– one of which had been responsible for 10% ofcomplaints to us in this area. When this firm, andseveral others like it, subsequently went out ofbusiness, we referred complaints that consumershad brought to us to the Financial ServicesCompensation Scheme (FSCS), as the fundof last resort.These particular complaints – together with thevolatility of the markets over that period – resultedin the volume of complaints to us in this arearising sharply between 2008 and 2010. As we hadanticipated, the number of new cases has noweased, largely reflecting the relative recovery ofthe markets in recent times.However, during the year we continued to receivecomplaints from consumers who were unhappywith the way in which their brokers and portfoliomanagers had responded to changing marketconditions.We also received a number of complaints frominvestors who lost money in funds which werefinancially backed by the failed investment bank,Lehman Brothers – or which were affected by theinvestment fraud carried out by the convicted USfinancier, Bernard Madoff.We were careful to decide these cases on thebasis of our usual approach where negligence isclaimed – looking at the individual circumstancesat the time of the sale or advice, without usingany hindsight.Annual Review 2010 | 2011

Financial Ombudsman Service61how we dealtwith the complaintsAnnual Review 2010 | 2011

62Financial Ombudsman Servicehow we dealt with the complaintsnumber of cases we resolvedWe continued to settle cases at record levels –resolving a total of 164,899 cases in the financialyear 2010/2011. This is 0.85% fewer than the166,321 cases we resolved in the previous year– and is the second highest number in any yearsince the ombudsman service was set up in theyear 2000.However, the number of cases we were ableto settle during the year was lower than wehad initially anticipated. This was because ofslower progress on large numbers of paymentprotection insurance (PPI) complaints – whichwere hampered by delays, uncertainty and lessco-operation from some financial businesses, as aresult of the legal challenge on PPI-related mattersbrought during the year by the British BankersAssociation (BBA) on behalf of a number ofhigh-street banks (see page 40).how we resolved the casesThe approach we take to resolving disputes islargely determined by the individual facts of eachcase – and by the level of formality required tosettle matters appropriately.Our preference is to resolve complaints informally– getting both sides to agree at an early stageto the views or informal settlements that ouradjudicators may suggest.But more complex or sensitive disputes mayrequire detailed investigations and lengthyreviews, including an appeal to one of ourpanel of 71 ombudsmen (see page 147) fora final decision.2002: 39,1942003: 56,4592004: 76,7042005: 90,9082006: 119,4322007: 111,6732008: 99,6992009: 113,9492010: 166,3212011: 164,899year ended 31 MarchAnnual Review 2010 | 2011

Financial Ombudsman Servicehow we dealt with the complaints63cases requiring an ombudsman’sfinal decisionDuring the year, the number of cases requiringthe direct involvement of an ombudsman – anda formal ombudsman decision – increasedsignificantly. 10,730 cases had a final decision byan ombudsman in the financial year 2009/2010– rising 63% to 17,465 cases in 2010/2011(following a 24% rise in the previous year).This means that 11% of cases we settledduring the year required an ombudsman tomake a final decision – as the last stage of ourprocess – compared with a figure of around 8%in earlier years.This increase in the number of cases where acomplaint is pursued to an ombudsman decisionappears to continue a trend highlighted in lastyear’s annual review. This is the shift towardsmore entrenched disputes – with businessesincreasingly taking a harder-fought and legalisticapproach, and consumers becoming moredemanding and less willing to concede.Of the final decisions made by ombudsmen duringthe year, 38% of requests were made by financialbusinesses and 62% by consumers. In over eightout of ten final decisions, ombudsmen reached thesame basic conclusions as the adjudicators whohandled the cases in the earlier stages. Where theydid not do so, there was usually a finely-balancedjudgement call or, more often, new facts came tolight only at that very late stage.Proportionately more cases were referred to anombudsman for a final decision where the disputerelated to pensions and investments – generallyreflecting the complexity of these disputes, thelarger amount of money often at stake, and thesocio-demographic background of many of theconsumers involved.which type of complaints requiredombudsman decisions?pensions 30%other investments 25%general insurance 16%mortgages 15%banking 13%consumer credit 7%payment protection insurance (PPI) 1.5%Annual Review 2010 | 2011

64Financial Ombudsman Servicehow we dealt with the complaintsombudsman decisions – by productYounger people are statistically less likely to requesta formal ombudsman’s decision than consumersof other ages. In fact, the proportion of casesrequiring an ombudsman’s final decision increasesby age group. However, this largely reflects thetypes of financial products involved – with olderpeople more likely to have more complex productssuch as pensions and investments. There is moreinformation about this on page 78.39%24%bankingother investmentsHowever, the proportion of men and women whorequested a final decision by an ombudsmanwas broadly similar – as was the proportion ofrequests made by consumers from different faithand ethnic groups. There is more informationabout the diversity of our customers – and theirexperience of our service – on pages 76 to 113.18%general insurance6%mortgages5.5%pensions4.5%payment protection insurance (PPI)3%consumer credit“… younger people are less likelyto request an ombudsman’s decisionthan consumers of other ages”Annual Review 2010 | 2011

Financial Ombudsman Servicehow we dealt with the complaints65hearingsAs part of our work resolving complaints, ourrules allow us to hold hearings – face-to-facemeetings – either in public or private. We can alsohold hearings over the phone, where this is moreconvenient for everyone involved. Hearings aregenerally as informal as possible.During the year we again held fewer than20 hearings in cases where the ombudsmanconsidered that it would help them get to thebottom of a case. We hold hearings only wherethe ombudsman believes a case cannot befairly decided on the basis of the documentaryevidence and the material that the two sideshave already provided.If we are asked for a hearing by either a consumeror a business, we consider carefully what valueit will add. We do not believe that hearingsshould be held just to allow either side toconfront the other in person – and neither sideis given a private meeting with the ombudsmandeciding the case.how we record the outcome ofcases we resolveWe record the outcome of a consumer’s complaintas “changed” – meaning we upheld the complaint– in cases where:■ The financial business told the consumer in itsfinal response that it had done nothing wrong– but after the complaint was referred to us, wedecided (or the business belatedly accepted)that it had done something wrong after all.or■ The financial business’s final response offeredthe consumer inadequate compensation– but after the complaint was referred to us,we required the business (or it belatedly agreed)to increase its offer to an appropriate level.We record the outcome of a complaint as “notchanged” – meaning we did not uphold theconsumer’s complaint – in cases where:■ The financial business had done nothing wrong.or■ The financial business had done somethingwrong, but had already offered the consumerappropriate redress (before the complaint wasreferred to us).Annual Review 2010 | 2011

66Financial Ombudsman Servicehow we dealt with the complaints% of complaints where the outcome changed as a result of our involvement(“we upheld the complaint”)insurance complaintsIn total we upheld 51% of the complaints wesettled in the financial year 2010/2011 –compared with 50% of cases in the previous year.complaints data about named businessesSince September 2009 we have publishedcomplaints data on our website every six monthsabout named individual businesses. The datashows the number of new complaints – and theproportion of complaints we upheld in favour ofconsumers – for businesses that have 30 or morenew cases (and 30 or more resolved cases) in eachsix-month period. The complaints data shows that:■ 150 or so businesses (out of more than100,000 covered by the ombudsman service)together generate around 90% of ourcomplaints workload.■ The number of complaints relating to eachindividual business included in the six-monthlydata has ranged from 30 to 12,750.payment protection insurance (PPI)motor insurancebuildings insurancecontents insurancetravel insurancehealth insurance■ The proportion of cases we uphold infavour of the consumer varies substantiallyfrom business to business – between 10%and 100%.putting things rightWhere we uphold a complaint in favourof a consumer, there are a number of waysin which we can put matters right – dependingon the individual circumstances of the case.These include:■ T elling the business to pay redress – to put theconsumer in the position they would now be in, ifthe business hadn’t got it wrong in the first place.■ Telling the business to compensate the20092010201189% 50% 44% 41% 39% 31%89% 38% 43% 38% 44% 35%66% 45% 42% 41% 42% 43%year ended 31 MarchWe did this in 20,019 cases during the year– 28% of the cases we upheld (24% in theprevious year) – generally awarding between£150 and £500.■ Directing the business to do something (or notdo something), to put right what’s gone wrong.This can range from correcting credit referencesto paying a previously-rejected insurance claim.■ Telling the business to apologise.consumer for distress and inconvenience.Annual Review 2010 | 2011

Financial Ombudsman Servicehow we dealt with the complaints67banking and credit complaintsinvestment complaintscurrent accountscredit cardsmortgagesunsecured loansconsumer creditsavings accountsother banking servicesmortgage endowmentswhole-of-life policies and savings endowmentsinvestment bondspensionsstockbroking and portfolio management200961% 76% 40% 49% 45% 64% 55%200937% 34% 42% 23% 42%201020% 68% 37% 48% 58% 51% 46%201038% 26% 45% 28% 49%201128% 61% 37% 43% 47% 42% 43%201131% 32% 60% 38% 66%Where we do not uphold a complaint in favour of aconsumer, our aim is to give a clear explanation –from an entirely impartial standpoint – as to whywe believe the financial business has done nothingwrong (or has already offered appropriate redress).In many cases it is poor communication between afinancial business and its customer that leads to asimple misunderstanding escalating to the stagewhere the ombudsman service has to get involved.Consumers can sometimes pursue complaintsin an unfocused way that may make them appearunreasonable to the business they complain to.On the other hand, businesses sometimes respondto customer concerns unhelpfully and defensively– aggravating problems that a clear, helpful andsympathetic explanation might have resolved.A consumer’s failure to present a reasonedargument does not automatically mean that acase has no merit – or that the complaint shouldbe categorised as “frivolous and vexatious”.Annual Review 2010 | 2011

68Financial Ombudsman Servicehow we dealt with the complaintsOf the 164,899 complaints we settled duringthe financial year 2010/2011, we concludedthat 1,447 cases (0.9% of the total) could becategorised in this way (0.4% in the previousyear). We do not charge a case fee to thebusiness complained about where we decidethat a complaint is “frivolous and vexatious”.timelinessThe chart below shows the time it takes to settlecomplaints that are referred to the ombudsmanservice.We resolved 41% of all complaints within threemonths and 70% within six months – bothimprovements on the previous year. However,reducing the time it takes us to settle casesremains a key priority for us in terms of improvingour customer service – and we aim to furtherimprove timeliness next year.time taken to resolve cases30% 56% 77% 88% 38% 67% 81% 89% 41% 70% 81% 87% 47% 75% 84% 88%2009 2010 2011 all cases 2011 excluding PPI complaintsresolved within 3 monthsresolved within 6 monthsresolved within 9 monthsresolved within 12 monthsyear ended 31 MarchAnnual Review 2010 | 2011

Financial Ombudsman Servicehow we dealt with the complaints69We are disappointed that our work to reduce thetime it takes us to resolve complaints has beenless successful in relation to cases involvingpayment protection insurance (PPI). Progress hasbeen much slower than we would have liked onmost PPI cases for two reasons:■ The number of PPI cases we received duringthe year exceeded by 127% the number wehad geared up to deal with, following publicconsultation at the start of the year. We hadexpected to receive 46,000 PPI cases – notthe record 104,597 cases we actually received.■ In addition to significant further volumes of newcases following publicity about the British BankersAssociation’s judicial review of PPI-related matters(see page 40), this legal challenge resultedin some businesses deciding not to respondsubstantively to many PPI complaints.The large volumes of PPI complaints – togetherwith delayed and uncertain progress on manyof these cases, as businesses become lessco-operative in handling them – means that theaverage time to resolve PPI complaints is nowsignificantly longer than for complaints aboutother products.As the table on page 68 shows, the timelinessfigures for 2010/2011 improve significantly if weexclude PPI cases – with 47% of all cases otherthan PPI resolved within three months and 75%of cases resolved with six months.However, it is not only in PPI cases where wehave seen more businesses taking a legalisticapproach to dispute resolution – often resultingin delayed progress and slower case handling.In most areas of our work, we are now seeingdisputes involving hard-fought argumentsand entrenched attitudes – on both sides – asbusinesses become less willing to concede andconsumers become more demanding.This resulted in a 63% increase during the year inthe number of cases where an ombudsman issueda final decision as the last stage of our process(see page 63).We continue to prioritise cases where consumersmight be disadvantaged by having to wait longer– for example, through financial hardship or formedical reasons. During the year we identifiedand prioritised 12,226 cases where financialhardship was a significant issue. Eight out often hardship cases involved complaints relatingto current accounts, and the other cases mostlyrelated to credit cards, overdrafts and loans.Of course, prioritising cases such as theseinevitably means that other complaints cannot beprogressed as quickly as we would otherwise like.qualityDelivering a high-quality service is of fundamentalimportance to us. It is what matters most to allour customers and stakeholders. “Quality” forus means that in every case we should be able toshow that we have:■ Made the decision in the right way – getting tothe heart of the issue and consistent with otherdecisions in similar cases.■ Treated the customer well – the consumer andthe business in each case – so that they aresatisfied with our level of service.■ Got the basics right – for example, respondingappropriately to different communication needs.Annual Review 2010 | 2011

70Financial Ombudsman Servicehow we dealt with the complaintsFurther steps we have taken during the year,to ensure that quality is at the heart of whatwe do, include:■ Designing an enhanced career model thatencourages and enables the professionaldevelopment of our case-handling staff.■ Further developing the role of our ombudsmenas mentors and coaches.■ Extending our approach to knowledgemanagement, to ensure that all our staff havethe information they need.■ Promoting a practical understanding of why andhow our customers may have different needs –and being able to respond appropriately.■ Motivating managers in all areas across theorganisation to champion the key importance ofquality as a core value within their own teams.■ Making sure that all our staff understand whyquality matters – in everything they do.During the year members of our executive team,as well as members of our board, again revieweda cross-section of randomly-selected closedcases, to see how the quality of case-handlingmakes a difference in individual complaints.learning and developingThe skills and knowledge of our staff are key toensuring high quality and consistency in our work.We dedicate significant resource to training andcontinuing professional development at all levels.During the year our staff spent a total of 30,087hours in training activities (30,546 in the previousyear) – an average of 3.7 days of training for eachemployee. This included:■ Briefings, updates and technical refreshertrainingfor adjudicators.■ A wide range of workshops and trainingfor our managers.■ Casework “clinics” led by ombudsmen andtechnical experts.We also trialled an “academy style” approachto training newly-recruited adjudicators. Thisinvolves an intensive classroom induction fortheir first 12 weeks, before placing each newadjudicator in a team of experienced adjudicatorsfor structured on-the-job training and mentoring.During the year we continued to provide ourstaff with the skills to deal confidently andsensitively with an increasingly diverse rangeof customers, including those with differentneeds. This included:■ Our latest disability-awareness and customerserviceprogramme – launched by wheelchairbasketball player, Ade Adepitan, a goldmedallistat the 2005 Paralympic World Cup– and run in partnership with eight disability,mental health and wellbeing charities,including the Samaritans, British DyslexiaAssociation and Alzheimer’s Society.“… we ran our customer-service programmein partnership with eight disability,mental health and wellbeing charities”Annual Review 2010 | 2011

Financial Ombudsman Servicehow we dealt with the complaints71■ Our “customer experience” workshops –aimed at helping us better understand whatit might feel like to interact with our servicefrom the perspective of a range of people fromdiverse backgrounds. We initially ran theseworkshops for our board and executive team– and have now extended the programme toinclude our managers, ombudsmen and newadjudicators joining us.knowledge and informationOne of our key priorities is to put knowledge andexpertise at the heart of everything we do. We relyon the skills, expertise and professionalism of ourstaff to resolve the complaints referred to us – andarrive at the right outcome in each case.We share up-to-date casework news andinformation across the organisation, using ourknowledge-management “toolkit” on our staffintranet. This helps us ensure the quality andconsistency of our approach to individual cases.This approach is supplemented with regular inhouseclinics, mentoring sessions, briefings andseminars – which help us share knowledge, learnand improve. During the year we also launched anonline forum and wiki on our intranet – for staffto share comments, questions and views aboutcasework issues.We are also committed to sharing our knowledgewith the outside world. Making informationincreasingly available about our approach toparticular types of cases should make it easier forconsumers and financial businesses to resolvemore complaints themselves – without referringthem to the ombudsman service.During the year we added or updated 2,073 pagesof our website and 13,124 pages of our staffintranet. This included doubling the content ofthe online technical resource on our website andrevising and updating the widely-used frequentlyaskedquestions (FAQ) section.stakeholder researchWe carry out a programme of stakeholder andcustomer research – to help give us a closerunderstanding of what our customers want, howthey rate the service we provide, and where wecould do things better. This programme includes:■ Carrying out customer research on an ongoingbasis, to record and measure how consumerswhose complaints we have handled rate variousaspects of the service we provided.■ Running surveys to monitor the views ofthe businesses we cover.■ Monitoring general consumer-awarenessof the ombudsman service, on a quarterly basis,to help with our work on accessibility – ensuringthat everyone who needs to contact us knowshow to find us and how to access our service.■ Running an online survey on our website,giving customers the opportunity to giveus feedback on the service they have receivedon their own case.During the year we also carried out a customer“segmentation” project (see page 103) – involvingresearch and focus groups with businesses andconsumers. This project gave us a significantinsight into the needs and behaviours of ourcustomers – in terms of their attitudes tocomplaints generally, as well as to using theombudsman service specifically.“… knowledge and expertiseare at the heart of everything we do”Annual Review 2010 | 2011

72Financial Ombudsman Servicehow we dealt with the complaintsWe are now using the insights we gained fromthis work to help us, as we develop and improveour processes and technology to better reflectthe needs of our customers. We have alsoused these insights to develop the “customerexperience” workshops described on page 71– as part of our commitment to developingindividual responsibility for providing tailoredservice that better meets individual needs.Results and feedback from these stakeholderresearchactivities are shown in more detailin the chapters who complained to us andwho the complaints were about.handling complaints about usRecognising where we have made mistakes– and learning from any shortcomings – is a vitalpart of our commitment to providing a service forour customers that we can be proud of. This iswhy – just like the businesses whose complaintswe handle – we have our own formal complaintsprocedure for people who are unhappy with thelevel of service we have provided.We can usually sort out many problemsstraight away – as soon as someone tells us thatthey are unhappy with the standard of servicethey have received. Prompt intervention by therelevant manager – and an immediate phone callto apologise or explain – means we can resolvemany issues at this level without the problemsescalating into formal complaints.But if we are not able to sort out matters at thisstage to the satisfaction of the customer, one ofour senior managers will look into the problem.This applies to complaints both from consumersand businesses. The process is entirely separatefrom the usual process that applies if a consumeror business disagrees with our views on the meritsof their case – and wants us to re-consider factsand arguments.In the financial year 2010/2011, we handled2,489 complaints about our service – includingcomplaints subsequently referred to theindependent assessor (see below). These relatedto 1.2% of our total caseload. 5% of thesecomplaints were made by businesses andthe others were all from consumers ortheir representatives.We upheld 33% of these complaints.This involved paying compensation in 271 cases,in recognition of the inconvenience caused bydelays or administrative errors on our part.The average payment – including compensationrecommended by the independent assessor– was £258.Where we are unable to resolve a complaintabout our service, it can be referred to theindependent assessor – for a formal independentreview of the level of service we have provided.Each year the independent assessor produces anannual report for our board, setting out findingsand recommendations made over the year.We publish the independent assessor’s reportin full on our website.Annual Review 2010 | 2011

Financial Ombudsman Servicehow we dealt with the complaints73our budget and fundingWe are funded by an annual levy paid by thebusinesses we cover – and by case fees that wecharge businesses for settling disputes referredto us about them.In the financial year 2010/2011 we did notcharge businesses case fees for the first threedisputes involving them. Businesses werecharged case fees only for the fourth (and anysubsequent) dispute during the year. There ismore information on page 120 about how manybusinesses paid case fees.Our budget is calculated on the basis ofworkload forecasts that we consult on publiclyeach year in January and February – before thestart of the new financial year.Following public consultation in Januaryand February 2010, the boards of the FSA andthe Financial Ombudsman Service approveda budget for the ombudsman service – for thefinancial year 2010/2011 – that assumed incomeo f £113.7 million, expenditure of £115.7 million,and a unit cost of £550. The actual final figuresfor the year showed total income of £98.3 million,expenditure of £105.9 million, and a unit cost of £639.The unit cost was higher than budgeted –reflecting the rising number of disputes involvinghard-fought arguments and entrenched attitudes.We suggested in last year’s annual review that thiscould turn out to be the case – when we warnedthat the increased complexity of the disputes wewere starting to see, and the marked increase incases requiring a final ombudsman’s decision,might reduce the impact of a range of operationalefficiencies we were introducing.The unit cost – and our ability to settle casespromptly and efficiently – has also beensignificantly affected by a wide range ofoperational challenges arising out of theBritish Bankers Association’s judicial reviewof PPI related matters (see page 40).our unit cost£600£639£555£500£496£484£529£508£400£433£300£200£100Our unit cost is calculated by dividing our total costs(before financing charges and any bad debt charge)by the number of cases we complete.2005 2006 2007 2008 2009 2010 2011year ended 31 MarchAnnual Review 2010 | 2011

74Financial Ombudsman Servicehow we dealt with the complaintsour income and expenditure (summary)actual budget actual actualyear ended year ended year ended year ended31 March 2011 31 March 2011 31 March 2010 31 March 2009£ million £ million £ million £ millionincomeannual levy 20.9 19.5 20.6 19.3case fees 77.1 94 77.6 46.1other income 0.3 0.2 0.2 0.4total income 98.3 113.7 98.4 65.8expenditurestaff-related costs 88.8 99.7 78.3 47.8other costs 15.0 13.9 12.3 8.7financing charges 0.0 0.2 0.0 0.1depreciation 2.1 1.9 1.8 1.4total expenditure 105.9 115.7 92.4 58.0surplus/(deficit) (7.6) (2.0) 6.0 7.8These figures are drawn from our unaudited management accounts. The directors’ reports andaudited financial statements are available separately on our website and as hard-copy.Annual Review 2010 | 2011

Financial Ombudsman Service75who complained to usAnnual Review 2010 | 2011

76Financial Ombudsman Servicewho complained to uswhat kind of consumer uses the ombudsman service?It is essential that we know what kinds ofWe carry out a wide range of research to find outconsumers bring complaints to the ombudsman more about our customers, as part of our work to:service – so that we can provide a service that■ Identify and respond to what people whomeets their needs and expectations.use our service – and our stakeholders moreUnderstanding who our customers are alsogenerally – want and expect from us.helps us identify specific areas and groups in the■ Update and improve our case-handlingcommunity where our service is less well knownprocedures to make our service easier to useand used.and more tailored to individual needs.■ Adjust how we work in individual cases toaddress particular accessibility issues.■ Meet our commitment to equality and diversity.■ Target specific outreach and awareness-raisingactivities.what age are consumers who complain to the ombudsman?The number of consumers bringing complaints to However, during the year the proportion ofthe Financial Ombudsman Service over the last complaints we received from consumers overthree years has increased substantially – but the 65 increased by a record 42%. This reflects theoverall proportion of people in each age group has significantly larger number of older people whoremained broadly similar over this period.have referred complaints to us about paymentprotection insurance (PPI). It may also reflectTwo thirds of consumers who use our service areour outreach work with older and retired peoplebetween the ages of 35 and 65. This reflects theover the last few years (see page 98) – with morefact that they are more likely to own a wider rangeconsumers in the older age groups now showingof financial products. Our research also shows thatincreased confidence in complaining.people in these age groups are generally also morelikely to know about their consumer rights, includingtheir right to complain to the ombudsman.Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us77We monitor closely the types of people whoinitially contact our consumer helpline –and compare these with the types of consumerwho subsequently pursue a case with us formally.This enables us to see if there are any differencesin the kinds of people who use our service atthe various different stages of our process. Ourresearch shows that people in all age groups areequally likely to pursue a complaint formally, oncethey have made informal contact with us initially –with the exception of consumers aged under 25(see page 96).Consumers under 25 and over 65 are slightlyless likely to have their complaints upheld thanpeople in other age groups – but this reflectsthe products they complain about. Youngerconsumers, in particular, are relatively less likelyto complain about payment protection insurance(PPI) – where we uphold a proportionately highnumber of cases in the consumer’s favour(see page 66).Younger consumers are also statistically morelikely than those in other age groups to agreeat an earlier stage with an adjudicator’s view orinformal settlement – and less likely to requesta formal ombudsman’s decision.3%under 2525%45-54age15%25-3417%55-6523%35-4417%over 65“… the proportion of complaints we received fromconsumers over 65 increased by a record 42%”Annual Review 2010 | 2011

78Financial Ombudsman Servicewho complained to uswhat age are consumers who pursue complaints to the final stage –for an ombudsman’s decision?The proportion of cases requiring anFor example, a quarter of complaints brought byombudsman’s final decision increases by age consumers aged 55 to 64 related to pensions andgroup. This largely reflects the types of financial investments (see page 98) – but these productsproducts involved. As people get older, they featured in only 2% of the cases brought bygenerally have more complex products such people aged between 25 and 34. On the otheras pensions and investments – areas where hand, younger people are – proportionately –ombudsmen are proportionately more involved significantly more likely to refer complaints toin making decisions, given the larger amounts of the ombudsman service about current accounts.money often at stake.There is more information about our work withyounger people – to help raise their awarenessof the ombudsman service, and their confidenceand ability to get problems sorted themselves– on page 96.10%under 2515%45-54age10%25-3424%55-6514%35-4427%over 65“... there is no significant differencein the outcome of cases based on gender”Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us79what gender are consumers who complain to the ombudsman?Men continue to complain more to theThe three products that women and men complainombudsman service than women. Theses figures about the most are:have remained unchanged for several years.■ payment protection insurance (24% of bothHowever, many complaints relate to accounts andmen’s and women’s complaints);policies that are held jointly, where conventionallythe first-named account-holder (the name our ■ current accounts (19% of women’s complaintssystem records) is generally a male partner.and 16% of men’s); andMore women contact us initially on our consumerhelpline than subsequently pursue complaintswith us formally. This is something we have beenmonitoring closely.Our research suggests that women are morelikely to be satisfied than men with the way afinancial business handles their complaint.This may explain why fewer women return to uswith a formal complaint, after our helpline hasexplained the complaints procedure and theimportance of complaining first to the businessthey are unhappy with.On the other hand, our research also showsthat women are less likely than men to takefurther action, if they remain unhappy with howthe business handles their complaint at thefirst stage of the complaints procedure. We willcontinue to keep this under review, as part ofour work to ensure our service is accessible toeveryone (see page 89).■ credit cards (13% of women’s complaints and11% of men’s).Taking into account the fact that the proportionof complaints we uphold varies according to thefinancial product involved (see page 66) – andthe proportion of products complained aboutby women and men varies slightly – there is nosignificant difference in the outcome of casesbased on gender.There is also no significant difference betweenmen and women in the proportion of casesrequiring an ombudsman’s decision to settlea case finally.gender38% female 62%maleAnnual Review 2010 | 2011

80Financial Ombudsman Servicewho complained to us% of consumers who complained to us1%live outside the UK9%Scotland10%2%Northern IrelandNorth East5%12%North West19%Midlands5%East AngliaWales29%South East(includingGreaterLondon)9%South WestAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us81where do consumers live who complain to us?This map shows where consumers live who Generally speaking, we saw a similar pattern ofbrought complaints to the ombudsman service complaints about most financial products acrossduring the year. The spread of our customers all areas of the UK. However, a higher proportionacross the UK remained similar to the previous of complaints from the North related to paymentyear – although the number of people from the protection insurance (PPI) than in the South.South East fell slightly and the proportion of For example, 56% of complaints from the Northconsumers from Scotland and the North East of East of England involved PPI in comparison withEngland rose by 12%.40% in the South East.Comparing these figures with regional populationdata helps us monitor awareness and use ofour service across the regions and nations.The location of people using the ombudsmanservice continues broadly to reflect the spreadof the population across the UK as a whole.the “top 20” places where people phoned us from the mostLadywood, BirminghamCottingham, HullWoodhouse, LeedsWest Derby, LiverpoolBridgeton, GlasgowMoston, ManchesterCroydonWe are able to build up a picture of where peoplephone us from the most, by seeing which phoneexchange their calls come through on.The places where people called us from themost were generally densely-populated anddiverse urban and suburban areas across the UK.Unsurprisingly, we received fewest calls fromremote areas of Wales and the Scottish Highlands.Mapperley, NottinghamCanton, CardiffGreat Sankey, WarringtonFulham, LondonHove, East SussexNorbiton, LondonFarley, LutonBlackfriars, SalfordKingsbury, LondonNarborough, LeicesterWembley, LondonStreatham, LondonWinchmore Hill, LondonAnnual Review 2010 | 2011

82Financial Ombudsman Servicewho complained to ushow did consumers who referred complaints to us know about the ombudsman?The main way that most consumers who refer Women are also 50% more likely than men tocomplaints to us hear about the ombudsman have heard about us through word of mouth –continues to be through the media (although this from friends, colleagues and family. Similarly,figure fell by 9% year-on-year).more women than men found out about us on theinternet – reflecting the 13% increase during theThis is different from what those consumers whoyear in people who knew about us this way. Theinitially contact our consumer helpline tell us,internet is how a significant proportion of Asianwhen we ask them how they first heard aboutconsumers also first heard about us (see page 94).us (see page 21). These consumers – getting intouch with us for initial help and guidance, rather Interestingly, people under the age of 25 werethan to refer a complaint to us formally – are more not the age group that relied the heaviest onlikely to know about us through word of mouth the internet for information about us. This isthan through the press.consistent with other feedback from students andyounger people on what they use the internet for.The importance of the traditional media, asIn particular, younger people have been clear thatthe primary way of finding out about us, is alsoclearly linked directly to age. Our research showswe should develop only a low-key social-mediathat younger people rely significantly less onpresence, to communicate with them. There isnewspapers to find out about us – and much moremore information about our outreach work withon what friends, colleagues and family tell them.younger people on page 96.29%in the media (press and broadcast)20%from a financial business17%on the internet16%7%2%from a friend, relative or colleaguefrom a consumer-advice agency(eg Trading Standards or Citizens Advice)other ombudsman or complaints scheme9%otherAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us83While 38% of people from professional andmanagerial (AB) backgrounds told us they heardabout us through the media, this figure fell toless than a quarter of people from the unskilled(DE) social-economic group – who relied forinformation about us significantly more onfriends, colleagues and family and on front-lineconsumer-advice agencies.Under the complaints-handling rules, businessescovered by the ombudsman service are requiredto mention the ombudsman when they dealwith a customer for the first time. Businessesalso have to give details about us, if a complaintarises which the business cannot resolve to thecustomer’s satisfaction.So we would expect a significant proportion ofconsumers who bring complaints to us to saythey were told about the ombudsman by thebusiness they complained to. The proportion ofconsumers who say that this is how they firstheard about us increased by 11% during theyear. We hope this reflects a sharper focus bysome businesses on improving their customerservice and complaints-handling. Men are a thirdmore likely than women to say they found outabout us from the financial business.There is more information on page 100 aboutgeneral levels of consumer awareness of theombudsman service.“… people under 25 were not the age groupthat relied most on the internet forinformation about us”Annual Review 2010 | 2011

84Financial Ombudsman Servicewho complained to uswhich newspapers do consumers read who complain to the ombudsman?Our research with consumers who use ourOver the last three years we have seen a shiftservice clearly shows that the extent to which in the newspapers that consumers who use thepeople find out about us by reading newspapers ombudsman service tell us they read.becomes increasingly important the olderThe proportion of “broadsheet” readers haspeople are. Younger consumers and those from declined, with the Sun, the News of the Worldnon-white ethnic backgrounds rely significantly and Metro gaining ground. This seems to reflectless on national newspapers to find out about the continuing shift in the socio-economicthe ombudsman service.background of consumers who now use ourservice (see page 86).However, the newspapers that people tell us theyread do not match exactly with the media thatcover the ombudsman service most frequently.21%regional and free papers(including Metro)21%Daily Mail/Mail on Sunday12%The Times/Sunday Times11%The Sun/News of the World9%The Telegraph/Sunday Telegraph6%The Mirror6%The Guardian/Observer5%The Express4%Financial Times3%The Independent/Independent on Sunday2%The StarAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us85which media cover the ombudsman most frequently?Over the year more than half of all media coverage The media that covered the ombudsman serviceof the ombudsman service was online, rather than most frequently during the year included nationalin traditional print format.newspapers, specialist business-to-businesspublications and consumer websites. There isOnline coverage of the ombudsman servicemore information about our work engaging withappeared on a very wide range of websitesstakeholders such as the media on page 128 of– run by voluntary and community groups,this annual review.businesses and business networks, andgovernment and public sector bodies –as well as the online versions of “traditional”newspapers and magazines. In addition, over 500organisations now link directly from their websitesto ours (see page 19)5%Money Marketing*4%Daily Mail/Mail on Sunday*3%thisismoney.co.uk3%The Telegraph/Sunday Telegraph*2%The Times/Sunday Times*2%Financial Adviser*1.5%The Guardian*1%moneysavingexpert.com1%the BBC31%other print publications46.5%other online coverage* print and online versionsAnnual Review 2010 | 2011

86Financial Ombudsman Servicewho complained to uswhat’s the socio-economic background of consumers who complain to the ombudsman?2011201020092008200735% 57% 8%36% 57% 7%41% 53% 6%48% 47% 5%59% 36% 5%year ended 31 MarchAB professional and managerialC1/C2 skilled and semi-skilledDE unskilledOur analysis of the occupations of people whorefer complaints to the ombudsman shows asteady socio-economic shift among the consumerswho use our service. In recent years, the proportionof complaints to the ombudsman from skilled,semi-skilled and unskilled workers has risenby 60%, while complaints from people fromprofessional and managerial backgrounds havefallen proportionately by over 40%.This shift may reflect the type of complaintsthat consumers refer to the ombudsman service –and the financial products and services involved.Between 2004 to 2007, up to two thirds of thecomplaints we handled related to mortgageendowments and were brought by mainlymiddle-aged homeowners.But since 2007 we have seen significantincreases in complaints involving current accounts,overdrafts, credit and payment protection insurance(PPI) – products which are held extensively by abroader socio-economic range of consumers.Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us87what do consumers from different socio-economic backgroundscomplain about to the ombudsman?payment protection insurance27%34%39%current and savings accounts22%24%23%loans and consumer credit22%21%17%investments and pensions17%13%12%motor and household insurance8%7%7%other4%1%2%The order of financial products most complainedabout is identical across the different socioeconomicgroups of consumers. However, therelative proportion of complaints about thesedifferent products varies significantly.For example, the proportion of complaints aboutcurrent and savings accounts – and about motorand household insurance – is broadly similaracross the three groups. But the proportion ofcomplaints about payment protection insurance(PPI), and about investments and pensions,differs substantially for consumers from ABand DE backgrounds.AB professional and managerial27% payment protectioninsurance (PPI)22% current andsavings accounts22% loans andconsumer credit17% investments andpensions8% motor and householdinsurance4% otherC1/C2 skilled and semi-skilled34% payment protectioninsurance (PPI)24% current andsavings accounts21% loans andconsumer credit13% investments andpensions7% motor and householdinsurance1% otherDE unskilled39% payment protectioninsurance (PPI)23% current andsavings accounts17% loans andconsumer credit12% investments andpensions7% motor and householdinsurance2% otherAnnual Review 2010 | 2011

88Financial Ombudsman Servicewho complained to uswhat’s the occupational background of consumers who complain to the ombudsman?33%skilled trades(eg electricians, plumbers, mechanics)19%managers and officials16%professionals16%administrative and secretarial5%4%process and plant work (eg machineryoperatives, assembly-line workers)personal services (eg care assistants,dental nurses)4%sales and customer service3%“elementary” occupations (eg hotel &bar staff, farm-workers, postal workers)49%employed26%retired15%self-employed/running own business1%studying9%otherAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us89During the year we saw a small rise in theproportion of consumers referring complaintsto us who worked in factories and in sales andcustomer service.While the number of people who said they wereemployed fell slightly – by 6% – the proportionof our customers who told us they were selfemployedincreased by 15%. And there wasa 29% rise in the number of people referringcomplaints to us whose lifestyle could not easilybe categorised along the traditional lines of“employed”, “self-employed” or “retired”.The socio-economic shift among the consumerswho use our service also reflects the focus ofour outreach work with groups whose knowledgeand use of us is lower than average. This workaims to help raise awareness of the right to bringfinancial disputes to the ombudsman service.There are more details later in this section aboutour awareness-raising and accessibility work.As part of our commitment to diversity andequality, we closely monitor the outcome of thecomplaints we resolve at the different stages ofour process – to ensure we are treating everyonefairly and equally. The results of this monitoringcontinue to show that the proportion of caseswe uphold in favour of the consumer is broadlyconsistent across groups of consumers froma wide range of backgrounds.accessibility and diversityBeing accessible is something we take veryseriously. We see this as part of our commitmentto treating everyone we deal with equally.Someone’s background or ability should not actas a barrier to having their complaint consideredfairly and impartially.Similarly, we see diversity as an asset thathelps deliver our vision of a service that meetsthe needs of all our customers and stakeholders.We work towards an “equality and diversitystandard” in the way we provide our service– to help us identify and overcome any barriersthat could:■ prevent potential customers from accessingour services; or■ work to the detriment of those already usingour service.Our high-level strategy on diversity and equality– published on our website – is set and monitoredby our board and executive team. Operationally, ourwork in this area is co-ordinated and championed byour customer service taskforce which brings togethersenior staff from all areas of the ombudsman service.“… background or ability should not be a barrier tohaving a complaint considered fairly and impartially”Annual Review 2010 | 2011

90Financial Ombudsman Servicewho complained to usDuring the year we continued to work with a rangeof external partners specialising in the area ofdiversity and equality. These included:■ a leading “equality consultancy” – providingus with ongoing strategic and practical advicein the role of a “critical friend”; and■ eight disability, mental health and wellbeingcharities – including the Samaritans,British Dyslexia Association and Alzheimer’sSociety – who provide training for our staffon disability issues.Our in-house customer service group – madeup predominantly of front-line staff across theombudsman service – also carries out a rangeof activities, to help keep us focused on the factthat each customer may have individual needs tobe taken into account. One of the key activitiesorganised by the customer service group duringthe year was the launch of our latest disabilityawarenessand customer-service programmedescribed on page 70.The customer service group has also providedinput and guidance on a number of equalityimpact assessments that we carried out duringthe year, covering areas such as:■ HR recruitment procedures;■ our physical working environment; and■ the impact on more vulnerable consumers ofthe delays and uncertainties arising out of theBritish Bankers Association’s judicial review onPPI-related matters.Over the following pages we highlight key areaswhere, following research and analysis, we haveprioritised specific outreach and awarenessraisingactivities during the year – or adjusted ourcase-handling procedures to address particularaccessibility issues.disability18% of consumers whose disputes we settledduring the year told us they had some form ofdisability – most commonly mobility difficulties.This is broadly in line with the number of disabledpeople in the UK estimated by the government’sOffice for Disability Issues.“… 1,200 staff took part in our customer-service event,focusing on mental health issues”Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us91disabled consumers who complain to the ombudsmanMany of our disabled customers do not ask for –or require – any adjustment in the way we dealwith their case. But we ask all consumers whenthey first contact us whether they would like us toadapt the way we communicate with them, to meetany particular needs they may have.21%19%12%11%9%8%mobility difficultiesarthritis and manualdexterity difficultiesheart and circulatory problems(eg stroke)organ and nervous-system disorders& disease (eg diabetes, MS)hearing impairmentrespiratory and breathingdifficulties (eg asthma)Our staff all receive training to help promote theirconfidence in dealing sensitively and practicallywith customers’ different needs. This included1,200 staff taking part in our “aiming high”customer-service event during the year – with afocus on learning disabilities and mental healthissues. This built on the successful differentneedsawareness-event we held for all staff in theprevious year.Our work promoting our services for disabledpeople during the year led to a doubling in thenumber of cases where we provided informationfor customers in alternative formats – such asin large print and Braille, and on CD. We alsocontinued to use Text Relay (formerly known as“TypeTalk”) and “accessible text” (sometimes alsocalled “EasyRead”).5%mental health issues4%sight impairment1%learning difficulties (eg dyslexia)10%otherAnnual Review 2010 | 2011

92Financial Ombudsman Servicewho complained to usmeeting customers’ different communication needsWe aim to take a flexible approach in cases wherea particular disability makes it necessary to adaptour more usual means of communicating withcustomers. There are some examples on page 21of cases where there was no ready-made solution.51%17%9%6%3%1%13%large printaudio CDusing colour-tinted paperBrailleaudio cassetteBritish Sign Languagemeeting different needs in other waysTo be able to understand better the issues thatdisabled people face in dealing with financialservices or making a complaint, we continue totake part in a range of disability events. During theyear this included Naidex (the UK’s largest eventfor homecare, disability and rehabilitation) heldboth at Birmingham NEC and the Excel Centrein London.We also continue to work in partnership withAble – the disability lifestyle-magazine andwebsite – to help raise the profile of theombudsman both as an employer and as adispute-resolution service. And we featuredin magazines including Disability, DisabilityReview Magazine and If only I’d known that ayear ago, the guide to living with ill health,injury or disability, published by RADAR,the disability network.consumers from black and minority ethnic(BME) backgroundsOver the last three years we have seen a steadyincrease in the proportion of consumers usingour service who define themselves as belongingto a non-white ethnic group. 12% of people whobrought complaints to the ombudsman servicesaid they had a non-white ethnic background(10.5% in the previous year).Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us93As part of this figure we have seen various trendsemerge over the last year:■ The proportion of Black/Black Britishconsumers using our service has increased(from 3% to 4.7%).■ The proportion of Asian/Asian Britishconsumers has remained broadly the same(4.7% compared with 4.3%).■ The proportion of consumers from Chineseand other ethnic backgrounds remains stable(1.7% of consumers referring complaints to us).The proportion of consumers from non-whiteethnic backgrounds who contacted us initially onour consumer helpline – for advice and guidanceat an early stage – was broadly the same as thenumber who subsequently went on to pursuecomplaints with us formally.However, consumers from non-white ethnicbackgrounds were a third more likely than whiteconsumers to complain directly to the ombudsmanservice themselves – rather than use a claimsmanagementcompany to refer a complaint to uson their behalf. White and non-white consumersare equally as likely as to appeal their case to anombudsman for a final decision (see page 63).38% of the complaints referred to us by Black/Black British consumers related to paymentprotection insurance (PPI) – compared to 27%of cases from white consumers and 19% of casesfrom Asian consumers.During the year we again marked Black HistoryMonth with a feature in the official Black HistoryMonth magazine. We also placed a series offeatures and advertising material in influentialBlack women’s magazines, Black Hair and Pride.what ethnic background do consumers come from who complain to the ombudsman?92%91%89.5%10.5%12%88%8%9%2008 2009 2010 2011non-white2008 2009 2010 2011whiteAnnual Review 2010 | 2011

94Financial Ombudsman Servicewho complained to usWe continued our long-term partnership withZEE magazine – as well as running advertisingin The Asian Today (a free, multi-faith paper forpeople in the Midlands) and across a range ofpopular UK Asian websites, to maintain levelsof awareness of the ombudsman service.Targeting information about the ombudsmanservice for the Asian community by using webbasedmaterial and online advertising reflectsthe findings of our annual online survey (seepage 110) – which continues to show a higherproportion of Asian consumers using our websitethan is the case for consumers from other ethnicgroups. This is in line with research indicatinghigher levels of internet use among the Asiancommunity more generally.what ethnic background are our website users?78%White9%Asian/Asian British5%Black/Black British2%Chinese6%otherAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us95what faith or religion do consumers follow who complain to the ombudsman?As part of our commitment to equality anddiversity, we ask consumers about their religiousor faith beliefs – in an optional question in ourcustomer survey. This survey is entirely voluntary– and is completed by consumers anonymouslyafter their case has been settled.This information – like all the other detailswe collect relating to the diversity of ourcustomers – helps us monitor whether weare handling complaints and making decisionsfairly and impartially.1%65%2%1%2%1%1%22%5%BuddhistChristianHinduJewishMuslimSikhother religionno religionprefer not to sayThese figures are broadly in line with informationabout consumers’ religious beliefs recorded in the2001 UK census. However, we received:■ 7% fewer complaints from consumers who toldus they were Christian; and■ 7% more complaints from consumers whoindicated that they did not follow any religion.Our monitoring of the outcome of cases over theyear shows that the proportion of complaints wehave upheld in favour of consumers varies slightlybetween different religious groups. However, thisclearly reflects the different financial productsinvolved – and the different uphold rates fordifferent products.For example, consumers who tell us they haveno religion complained the most about paymentprotection insurance (PPI) – which has one of thehighest uphold rates as a product. This meant thatconsumers with no religion had a high proportionof their complaints upheld throughout the year.However, Jewish and Sikh consumers complainedthe least about PPI (only 9% and 10%, respectively,of their total complaints – compared with 35% ofthe complaints from consumers with no religion).This was reflected in a relatively lower uphold rateoverall for these consumers.Annual Review 2010 | 2011

96Financial Ombudsman Servicewho complained to usyounger consumersT he proportion of consumers aged between 25and 34 who bring complaints to the ombudsmanservice is broadly in line with the proportionof the UK adult population as a whole. But theproportion of adults aged under 25 who use ourservice is only a third of the proportion of that agegroup across the UK.This largely reflects the fact that people under25 generally own fewer financial products thanolder, more financially-established consumers.But although younger people are significantly lesslikely to have investments and pensions, theyare likely to have loans, credit cards and bankaccounts – and to take out insurance for loans,travel, mobile phones, cars and motor bikes.This is reflected in the complaints we do see fromthis age group – as shown in the chart below. This isthe only age group where the financial productthat was most complained about during the yearwas not payment protection insurance (PPI).what do consumers under 25 complain to us about?In our consumer research, 23% of people under25 said they had “had a problem with a financialproduct or service” – a higher figure than for mostother age groups. But only 8% of these youngpeople – significantly lower than for any other agegroup – said they had then gone on “to make aformal complaint against a financial company”.This appears to support the widely-held view thatit is the “formality” of making a complaint – andthe time involved in following the “official”procedure – that younger consumers findparticularly off-putting.42%14%9%8%8%19%current accountspayment protection insurance (PPI)motor insurancecredit cardsloansotherBut it may also indicate that problems faced byyounger people – who will be new to using manyfinancial products – can be more easily resolvedby financial businesses, without escalating intoformal complaints.This may explain why consumers under 25,who initially approach us on our consumerhelpline, are statistically less likely than peopleof other ages to subsequently refer a “formal”complaint to us. Younger consumers are alsosignificantly less likely to pursue a complaint toan ombudsman for a final decision, if they areunhappy with an adjudicator’s view (see page 78).Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us97However, consumers under 25 are relatively morelikely than consumers in most other age groupsto complain to us directly – rather than through aclaims-management company (see page 30).As part of our consumer research over the year,almost half of 18 to 24 year olds across theUK said they had not heard of the FinancialOmbudsman Service. But awareness of our serviceamong consumers aged between 25 and 34 wassignificantly higher – with 72% of people in thisage group recognising our name.We are particularly keen to focus on youngerconsumers – to help raise awareness of theirright to complain and the role of the ombudsman.Recognising that younger consumers accessinformation differently from older people,we continue to explore different ways ofcommunicating with this age group – and wework with a range of specialist partners to getour message across. This includes:■ Featuring tailored messages in youthpublications such as The Festival Guide andThe Gap Year Travel Guide.■ Developing our internet presence on socialnetworkingsites such as YouTube and Twitter– but keeping our social-media messagessimple and low key, in line with advice fromthe young people we meet and consult with.■ Taking part in events like the Gadget Show Live– to encourage young high-spending consumersto confront and deal with financial problems.■ Supporting the UK national finals of the 2010Young Consumers of the Year competition –as well as the finals of the Young ConsumerChallenge which helps young people withlearning difficulties become better-informedand more confident consumers.“… younger consumers find the “formality”of complaining off-putting”Annual Review 2010 | 2011

98Financial Ombudsman Servicewho complained to usolder consumersOver a third of all consumers who referredcomplaints to the ombudsman service during theyear were aged 55 or over – and over a quarterwere retired. The proportion of people aged 55 to65 who complained to us fell by 15% – but 42%more people aged over 65 brought complaintsto us, with significantly more complaints aboutpayment protection insurance (PPI).Consumers over 55 are significantly more likely topursue a complaint to an ombudsman for a finaldecision, if they are unhappy with an adjudicator’sview (see page 78). However, this largely reflectsthe types of financial products involved – witholder people more likely to have more complexproducts such as pensions and investments,where more money may be at stake.A major focus of our outreach work is to remindolder and retired people about their right asconsumers to use the ombudsman service,should they have a dispute with a financialbusiness. This work also helps us betterunderstand the issues faced by older peoplein their dealings with financial services.what do consumers between 55 and 64 complain to us about?25%payment protection insurance (PPI)24%investments and pensions21%loans18%current accounts7%motor and household insurance5%otherAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us99Our research continues to show a significantdivergence within the older age-groups betweenconsumers who are capable users of technologyand those who cannot, or do not, use computersand the internet. 32% of consumers aged between55 and 64 told us that they did not have internetaccess – rising to 64% of consumers aged65 or over. On the other hand, just 3% ofpeople aged between 25 and 34 say they donot have internet access.the diversity of our own workforceThe average age of people working at theombudsman service during the year was 35 –with employees ranging from 18 to 72 years old.Across our workforce as a whole, 54% are maleand 46% female. Women account for 50% of ournon-executive board, 50% of our executive teamand 46% of our panel of ombudsmen. 17% ofour employees are from non-white ethnicminority backgrounds.To reflect this difference in preferredcommunication methods, our strategy forcommunicating with older people includes:■ Taking part in face-to-face events – such asthe Caravan and Motorhome Show and theRetirement Show.■ Featuring on “silver surfer” websites.■ Focusing targeted messages throughspecialist publications – such as RetirementToday and Choice, the lifestyle magazinefor people over 50.“… 64% of consumers aged over 65 told usthey didn’t have internet access”Annual Review 2010 | 2011

100Financial Ombudsman Servicewho complained to uslevels of consumer awareness of the ombudsman service17%people who could name us, without any prompting45%16%22%people who said they definitely knew of us,when they were told our namepeople who said they may have heard of us,when they were told our namepeople who didn’t recognise our nameor know who we wereAs well as analysing demographic informationabout the consumers who bring complaints tothe ombudsman service, we continue to researchlevels of consumer awareness of the ombudsmanmore generally across the adult population.Tracking differences in levels of awareness ofthe ombudsman across different groups andcommunities is very important as part of ourcommitment to:Over the last three years, levels of awareness ofthe ombudsman have increased steadily. 17% ofthe adult population are now able to actively nameus, without any prompting, as the organisationwhose job it is to help consumers sort outindividual disputes with financial businesses.■ understand why some people do not knowabout us or use our service; and■ identify where there could be barriers –which we could minimise or remove –preventing some people from bringingcomplaints to the ombudsman service.Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us101awareness of the ombudsman service across different groups of consumersThis chart shows varying levels of awareness During the year we continued to run targetedacross different groups of consumers. Broadly consumer initiatives to help raise levels ofspeaking, those least likely to recognise our name awareness and use of the ombudsman serviceor know about us are younger people and people – where our research identified specific groupsfrom DE socio-economic backgrounds.of more vulnerable consumers, or those whoappeared to be less likely to know about, or toThere is more information about how consumersuse, our service. There are more details earlier inhear about the ombudsman on page 21.this chapter about this aspect of our work.men80%women77%18 to 24 year olds44%55 to 64 year olds92%Asian/Asian British consumers60%White consumers81%professionals and managers (AB consumers)85%unskilled (DE) consumers70%people in Wales84%people in Northern Ireland64%people in Scotland80%people in England78%Annual Review 2010 | 2011

102Financial Ombudsman Servicewho complained to usconsumers who do not use our serviceThe results of our quarterly phone-based marketresearch consistently show that around 15%of people say they have had a problem with afinancial product or service. Around two thirds ofthese people say they went on to make a formalcomplaint to the financial business involved.69% of people who told us in this marketresearch that they had made a formal complaintto a financial business said they were satisfiedwith the business’s response. This figure hasbeen steadily declining over the last few years– from 75% in January 2009.However, the figure is still significantly higherthan the proportion of those people who hadinitially contacted our own consumer helplinefor advice on how to complain – and whosubsequently told us they remained dissatisfiedwith the business’s response (see page 22).Of the people who said in our market researchthat they had remained dissatisfied with thebusiness’s response to their complaint, arounda half took no further action. This meant theydid not refer their complaint at this stage to theombudsman service.We are particularly interested in people’sreasons for not pursuing complaints furtherat this stage – including using our service.We want to understand whether barriers – real orperceived – may exist in accessing our service,and where we need to target specific outreachand awareness-raising activities or adjust ourcasehandling procedures to address particularaccessibility issues.why consumers say they did not pursue a complaint –even though they were dissatisfied with the business’s response38%“I didn’t think I would achieve anything”17%“I found it too stressful”13%“I found the business difficult to deal with”9%“I had other more important priorities”9%“I didn’t think it was worth my time”4%“It didn’t seem worth it for the money involved”10%otherAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us103“… half of consumers who remained dissatisfiedwith a business’s response to their complainttook no further action”Our research shows – unsurprisingly – thatconsumers who do not refer unresolvedcomplaints to the ombudsman service are alsothose who are least likely to complain formally toa financial business in the first place. These aregenerally younger people, women, and consumersfrom the unskilled (DE) socio-economic group.The majority of consumers who do not pursuecomplaints – either to the business in question orto the ombudsman service – say this is becausethey cannot see the point in complaining, findthe experience too stressful, or are put off by theprocess involved.We have carried out research during the year tohelp us better understand people’s approach andattitude to complaining.attitude to complainingPeople’s attitude to complaining – and the way inwhich they interact with our service – is significantlyrelated to demographic factors, such as their age,gender and socio-economic background.However, we recognise that there are factorsthat may affect people’s approach and attitudeto complaining – which may not be defined by,or limited to, specific demographic groups.During the year we carried out research to seehow different personality types respond tosituations involving complaints and complaining.This research included a series of focus groupsround the country, to find out more about howpeople feel about complaining – and howcomplaining affects their behaviour. This showedthat, broadly speaking, consumers identifythemselves as one of three distinct groups(or “segments”) when it comes to complaints(see page 104).Annual Review 2010 | 2011

104Financial Ombudsman Servicewho complained to ushow consumers feel about complaining“Complaining is a hassle, so I’d wantto work out if it was worth it. If theprocess was easy, or someone else wouldtake it on, then I’d go for it.”22%23%16%“I generally don’t like complaining.It can be quite stressful as it’s myword against theirs.”22%32%19%“I’d complain and give them a deadlineto sort it out. If it wasn’t sorted out,I’d take it further. I believe you need to goto the top to get a problem solved.”56%45%65%consumers in generalconsumers who use our websiteconsumers who contact the ombudsmanAnnual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us105These consumer “segments” appear to confirma widely-held view that consumers who pursuecomplaints to the ombudsman service are morelikely to be self-confident, determined and atease when asking questions and expressingdissatisfaction.Having this insight into how consumers feeland behave in relation to complaints isparticularly important for us. It helps us makesure that our processes and procedures are easyto use and flexible – built around, and reflecting,our customers’ needs – and that they helpincrease the confidence of consumers in thefirst two “segments”.However, consumers can refer complaints to theombudsman service only after they have alreadybeen through the complaints procedure of thebusiness they are unhappy with. This means thatattitudes and behaviours – on both sides – mayalready be entrenched before our involvement starts.trust and valuesOur consumer research monitors the level of trustthat people have in the ombudsman service.Across the UK public as a whole, 70% of peoplesay they would trust the ombudsman service.This compares with 76% of people who say theywould trust their local Trading Standards and81% of people who say they would trust CitizensAdvice. On the other hand, levels of consumer trustin financial services trade associations appearsignificantly lower – between 46% and 54%.10% of people who had heard about us – butnot used our service – said they would trust uscompletely (compared with 27% of people whowould trust Citizens Advice completely and 2% ofpeople who would trust a financial services tradeassociation completely).But when people had directly experienced ourservice, their level of trust in us increased five-fold– with 50% of consumers trusting us completelyat that stage.During the year we carried out market researchinto how consumers understand and respondto our corporate identity, branding and values.This involved face-to-face interviews witha range of consumers on issues such as ourname, our logo and the look of our websiteand publications.The feedback from consumers was verysimilar to the results from the same researchwe had carried out eighteen months earlier.The consumers who were interviewed felt thatthe most important aspects of the ombudsmanservice are that we have the power to put thingsright and are free to consumers. They set lessstore by the fact that we were set up byparliament and have wide-ranging experience.“… direct contact with the ombudsman servicesignificantly increased people’s trust in us”Annual Review 2010 | 2011

106Financial Ombudsman Servicewho complained to uspeople say it’s important to them that the ombudsman ...20%has the power to put things right19%is free to consumers18%is completely independent18%is fair and impartial, looking at both sides13%was officially set up by parliament12%has over ten years experience of settling complaints“… we reduced the number of wordsin our leaflet by 20%”Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us107what do you associate with the word “ombudsman”?We also asked consumers who took part in ourmarket research for their response to the word“ombudsman”. The following “word cloud”reflects how people replied. The bigger thetypeface, the greater the strength of the response.Following feedback from consumers as part ofour market research – together with commentsand suggestion from our industry panel (see page123) – we also reviewed our consumer leaflet,your complaint and the ombudsman. The broadconsensus – among consumers and businesses– was that people wanted fewer words and lessdetail, and more graphics and colour to helpfocus attention.Taking account of this, we reduced the numberof words in the leaflet by 20% so that there arefewer pages. We have also introduced full-colourgraphics, to help “signpost” people through thedocument. We worked with the disability charity,the Shaw Trust, to make sure the leaflet is fullyaccessible and readable.Annual Review 2010 | 2011

108Financial Ombudsman Servicewho complained to ushow do consumers who complain to the ombudsman rate the service we provide?we handle complaints efficiently and professionally75% 13% 12%we get to the bottom of complaints and deal with the issues thoroughly70% 10% 20%our decisions on cases are fair and unbiased61% 14% 25%we settle disputes within an acceptable length of time51% 16% 33%we provide a good dispute-resolution service for consumers70% 9% 21%we provide a service that you would recommend to family and friends74% 9% 17%% of consumers who agree% of consumers who express no view% of consumers who disagreeDuring the year the overall levels of positiveand negative feedback from consumers – on theservice we provide – were broadly similar to thosewe recorded the previous year.There were improvements across four aspects ofour service – including an increase from 47% to51% in the proportion of people who agreed thatwe settle complaints within an acceptable lengthof time (and a corresponding decrease in negativefeedback on our timeliness).This reflects the improvement in the timeliness ofour complaints handling over the year – with the51% of people who were satisfied with the time ittook us to settle their case closely mirroring theproportion of cases that we resolved in less thanthree months (see page 68).Making further improvements to timelinessnext year remains a key priority for us. However,as we explain on page 69, we expect that overallimprovements in the time it takes us to resolvecases will be adversely affected by the delays anduncertain progress on large numbers of paymentprotection insurance (PPI) cases. This follows theBritish Bankers Association’s judicial review ofPPI-related matters (see page 40) and the decisionby some businesses not to respond substantivelyto many PPI complaints.Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us109The one area of our service where consumersrated us lower than in the previous year was theperceived fairness of our decisions. However,the 25% of consumers who disagreed that ourdecisions were fair and unbiased accounted foronly half the total number of consumers whosecomplaints we did not uphold.This suggests that satisfaction with ourimpartiality and fairness is not entirely determinedby the outcome of complaints (see below).During the year 74% of people whose complaintswe handled said they would recommend us to familyand friends – the same as in the previous year.how does the outcome of a complaint affect how consumers rate the service we provide?There is a strong link between the outcome ofconsumers’ complaints and their feedback on thelevel of service we provided.consumers who said they felt they had “won” their complaintconsumers who said they felt they had “lost” their complaint88% 8% 4%51% 34% 15%% who gave us positive feedback on the level of service we provided% who gave us negative feedback% who expressed no viewSimilarly, 91% of consumers who felt theyhad “won” their complaint said they wouldrecommend our service. 56% of those who feltthey had “lost” their case said they would do so.Unfortunately, we cannot please everyone.But seeking the views of those who have usedour service is an essential part of finding outhow we can improve.This shows how people’s personal experienceof our service is significantly influenced byhow they perceive the outcome of their ownindividual complaint. Even so, many of thosewho did not get the outcome they had hopedfor still expressed positive views across arange of aspects of our service.“ … 74% of people said they would recommend us”Annual Review 2010 | 2011

110Financial Ombudsman Servicewho complained to usour website usersDuring the year we recorded a monthly averageof 225,000 visits to our website, www.financialombudsman.org.uk(210,000 in the previous year).On the busiest day of the year – when we publishedour last annual review – 11,581 people logged onto the website. And 413 people downloaded ourcomplaint form on Christmas Day.There is more information on page 19 about howour website forms a key part of our front-lineservice to customers.To find out more about our website users, we run aweb-based user-survey over a three month periodeach year. Key findings from this year’s surveyshowed that:■ 68% of people were first-time visitors and■ 71% of users said they would definitely visitour website again and 22% said they wouldprobably do so.■ 30% of people said they came to our websitespecifically to find information on how tocomplain and 27% said they were lookingfor our contact details.Knowing what kinds of people do and do notaccess our website is very important for us.It helps us make decisions on its design andcontent. And it helps when assessing the mostappropriate channels of communication to get ourmessages across effectively. It also helps us inconsidering the advantages and disadvantagesof different methods of engaging with customersand delivering our service.32% had been on our website before.■ 59% of users were male and 41% female.what age are our website users?under 2525-3435-4445-5455-65over 653%3%21%15%23%23%25%25%21%17%7%17%Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us111The proportion of people aged 55 and over whouse our website rose by 17% during the year –continuing an increase we have seen in the lastfew years. The proportion of older consumers whowent on to refer a complaint to us also increasedduring the year (see page 76).However, we know that a significant numberof older people still do not or cannot use theinternet. The research on page 99 shows that32% of people between 55 and 64 who use ourservice do not have internet access – rising to 64%of consumers aged 65 or over. Consumers over 65are more than twice as likely to refer a complaint tous as they are to look at our website.On the other hand, just 3% of people between 25and 34 say they do not have internet access. Andthese consumers are around a third more likely tovisit our website than to refer a complaint to us.where do our website users live?South East(including Greater London)MidlandsNorth WestSouth WestNorth EastScotlandEast AngliaWalesNorthern Irelandoutside the UK28%28%15%19%15%12%12%9%3%10%2.5%9%6.5%5%6%5%2%2%10%1%% who use our website% who complain to the ombudsmanAnnual Review 2010 | 2011

112Financial Ombudsman Servicewho complained to usInformation from our online survey suggeststhat consumers in Scotland and the North Eastof England are substantially less likely to use ourwebsite than they are to refer complaints to us.On the other hand, more people in the North Westand the South West use our website than actuallycomplain to us.Our website also continues to attract a growingnumber of overseas visitors – including consumersaround the world whose feedback shows that theyare comparing our approach in the UK to resolvingparticular financial disputes with what happensabout similar issues where they live.These regional differences appear to beonly partially explained by wider patterns ofinternet access (and broadband connections)across the UK. So we will need to monitor thesetrends and carry out more research to seewhat they may mean.how did our website users find out about the site?59%24%7%10%through an internet search-enginefrom a financial businessthrough a link on another websitefrom a friend or colleagueDuring the year we saw an increase of a third inthe number of people who said they found ourwebsite through internet searches – mostly usingGoogle. This continues a steady increase we haveseen over the last few years in the number ofpeople using search engines to find our site.Other websites from which people are mostfrequently referred to ours include bbc.co.uk,yahoo and moneysavingexpert.co.uk.Annual Review 2010 | 2011

Financial Ombudsman Servicewho complained to us113what stage are our website users at in pursuing their own complaints?2%32%7%34%25%only browsing at this stagethinking about making a complaintto a financial businesswaiting for a financial businessto reach a decision on their complaintthinking about referring an unresolveddispute to the ombudsman servicewaiting for the ombudsman service tomake a decision on their complaintThe number of people using our website who saidthey were only browsing fell sharply this year –from 10% of users to just 2%. However,the proportion of people who said they werethinking about complaining – either to a financialbusiness or to us – increased from 53% to 66%.Annual Review 2010 | 2011

114Financial Ombudsman Servicewho complained to us10financial services groups73% accounted forof new cases& 2,916 businesses each had fewer than4 complaints and so paid no case feesAnnual Review 2010 | 2011

Financial Ombudsman Service115who the complaintswere aboutAnnual Review 2010 | 2011

116Financial Ombudsman Servicewho the complaints were aboutbusinesses complained about – by sector65.5%banks9.5%general-insuranceintermediaries9%general insurers5%3.5%2%life insurance and investmentproduct-providersmortgage intermediariesbuilding societiesbusinessescomplained about– by sector2%1.5%2%businesses with aconsumer-credit licenceindependent financialadvisers (IFAs)other (including fund managersand stockbrokers)The proportion of cases we dealt with in thefinancial year 2010/2011 that related to banksrose from 61% to 65.5%. This reflected the 113%increase in the volume of complaints aboutpayment protection insurance (PPI) during theyear. The rise in the proportion of cases involvinggeneral-insurance intermediaries from 8% to 9.5%also largely related to the increasing PPI caseload.The proportions of cases involving life insuranceand investment product-providers, andindependent financial advisers (IFAs), continuedto decline – from 8% to 5%, and from 2% to1.5%, respectively – reflecting the 30% fall in thenumber of complaints to the ombudsman serviceabout investments and pensions.Annual Review 2010 | 2011

Financial Ombudsman Servicewho the complaints were about117financial products most frequently complained about – by sectorcomplaints aboutbanking and credit80% banks8% mortgageintermediaries6% businesses with aconsumer-credit licence2% building societies4% othercomplaints aboutmortgages68% banks16% mortgageintermediaries8% building societies8% other (including IFAs)complaints about paymentprotection insurance (PPI)77% banks17% insurance intermediaries2% general insurers2% building societies2% othercomplaints aboutinvestment products44% life insurance& investmentproduct-providers21% banks14% IFAs9% stockbrokers andfund managers5% building societiescomplaints about generalinsurance (excluding PPI)7% other (including friendlysocieties and credit unions)73% general insurers13% insuranceintermediaries7% life insurance& investmentproduct-providers3% banks1% Society of Lloyd’s3% other (including cash-planhealth insurers)complaints about pensions53% life insurance& investmentproduct-providers25% IFAs9% banks13% other (including buildingsocieties and stockbrokers)Annual Review 2010 | 2011

118Financial Ombudsman Servicewho the complaints were aboutoutcome of cases – by sectorOn page 66 of this annual review, we show theoutcome of complaints in relation to the financialproducts we receive most complaints about. Forthese products, the proportion of cases we upheldin favour of consumers ranged from 28% to 66%.On page 66 we also refer to the six-monthly sets ofdata published on our website – relating to the 150or so individual businesses that together generatearound 90% of our complaints workload. This datashows the number of new complaints – and theproportion of complaints we upheld in favour ofconsumers – for each of these businesses.The chart below shows the outcome of casesin the financial year 2010/2011 – by sector.% of complaints where the outcome changed as a result of our involvement(“we upheld the complaint”)banks52%general insurers46%life insurance and investment product-providers33%intermediaries selling payment protection insurance (PPI)80%intermediaries selling general insurance40%intermediaries selling banking and/or mortgage products41%independent financial advisers (IFAs)53%building societies22%businesses with a consumer-credit licence50%Annual Review 2010 | 2011

Financial Ombudsman Servicewho the complaints were about119how often do businesses have complaints about them referred to the ombudsman service?2,131 businesses each had 1 complaint referred to the ombudsman service during the year558 businesses each had 2 complaints to the ombudsman227 businesses each had 3 complaints to the ombudsman496 businesses each had between 4 and 10 complaints to the ombudsman180 businesses each had between 11 and 20 complaints to the ombudsman146 businesses each had between 21 and 50 complaints to the ombudsman70 businesses each had between 51 and 100 complaints to the ombudsman63 businesses each had between 101 and 250 complaints to the ombudsman37 businesses each had between 251 and 500 complaints to the ombudsman40 businesses each had more than 500 complaints referred to the ombudsman during the yearCustomers of over 100,000 businesses that providefinancial services have the statutory protectionof the Financial Ombudsman Service, should adispute arise. This includes 80,000 businesseswith a standard consumer-credit licence issued bythe Office of Fair Trading (OFT); banking, mortgage,investment and insurance firms regulated bythe Financial Services Authority (FSA); and alsoNational Savings & Investments (NSI).These businesses range in size from globalfinancial services groups to sole traders providingcredit as a sideline to their main business.This range in size is reflected in the numberof complaints we receive about the differentbusinesses we cover – which followed a verysimilar pattern during the year to previous years .Annual Review 2010 | 2011

120Financial Ombudsman Servicewho the complaints were about10 73%financial services groupsaccounted forof new cases22% the next of cases were from267businesses (with between 20 and 1,000 cases each)the remaining 5% of cases were from3,592 businesses (with 20 or fewer cases each)In the financial year 2010/2011, fewer than 4%of the total number of businesses covered bythe ombudsman service had complaints referredto us. Four of the UK’s largest financial servicesgroups accounted for 105,365 cases (51% of allthe complaints we received). At the other endof the scale, 124 cases (0.1% of all complaints)related to friendly societies (183 in the previousyear) and 30 complaints involved credit unions.During the year we published complaintsdata showing the number of new cases, anduphold rates, for each of the 150 or so financialbusinesses that together generate some 90% ofour workload. There is more information aboutthis on page 66.2,916 businesses – out of the 3,948 in total thathad complaints referred to the ombudsman serviceduring the year – had fewer than four complaints.This meant that 74% of businesses with complaintsreferred to the ombudsman service paid no casefees – as again we did not charge for the first threecomplaints during the year.“... fewer than 4% of the total number of businesseswe cover had complaints referred to us”Annual Review 2010 | 2011

Financial Ombudsman Servicewho the complaints were about121how do businesses rate the service we provide?the financial services industry can have confidence in the ombudsman service44% 32% 24%our service is good value for businesses who pay the levy/case fees that fund us35% 38% 27%our decisions on cases are fair and unbiased55% 27% 18%our decisions are consistent36% 30% 34%we provide a good dispute-resolution service for businesses61% 23% 16%% who agreed % who expressed no view % who disagreedWe carry out quarterly surveys on how thebusinesses we deal with rate the level of servicewe provide. These surveys cover all sectors of thefinancial services industry, ranging from soleproprietorbusinesses to the largest financial groups.On average, the proportion of businessesagreeing with the statements above about ourservice slipped back during the year.However, around a third of businesses were unableor unwilling to express views on issues widelyconsidered to be of key interest to the financialservices industry – namely the consistency of ourdecisions and our value for money.And the overall proportion of businessesagreeing that our decisions are fair and unbiased– and that we provide a good dispute-resolutionservice for businesses – is higher than theproportion of cases in total where we did notuphold the case and where we agreed thatbusinesses had done nothing wrong.This suggests that the way businesses ratethese aspects of our service may not be entirelydetermined by the outcome of complaints.Annual Review 2010 | 2011

122Financial Ombudsman Servicewho the complaints were aboutliaison with financial businesses and trade associationsOn page 128 of this annual review, we highlight During the year we have recorded feedback fromsome of the external-liaison work we have carried businesses on what they think about the ways inout during the year with the financial services which we share information with them about ourindustry – including training and guidance work settling disputes – and which one of ouron complaints-handling and the work of our external-liaison support services they most value.technical advice desk in supporting and educatingbusinesses on complaints prevention.which of our support services do businesses value?21%our website (including ouronline technical resource)21%our technical advice desk19%publications (including ourquick guides for businesses)18%ombudsman news11%conferences and seminars10%visits and training“… our technical advice desk supports and educatesbusinesses on complaints prevention”Annual Review 2010 | 2011

Financial Ombudsman Servicewho the complaints were about123We also run a relationship-managementprogramme involving the 35 financial servicesgroups that together accounted for 85% ofcomplaints referred to the ombudsman serviceduring the year. This includes establishingconstructive relationships between ourselves andthe businesses concerned, at both operationaland strategic level, to ensure that the significantcaseloads involved are managed as effectivelyand efficiently as possible.For smaller businesses, we have a teamof relationship managers with regionalresponsibilities – who work closely with localbranches of trade bodies and provide a namedpoint of contact for businesses in each area.Our relationship managers also run ourintroduction to the ombudsman seminars acrossthe UK, where smaller businesses – who areotherwise less likely to have direct contact withus – can meet us and ask questions face-to-face.As well as the regular contact we have withbusinesses and their trade associations at thisoperational level, we have also always hadmore formal arrangements in place for strategicdialogue with the financial services industry.Following consultation with industry stakeholders,we replaced the three sectoral liaison-groups(for banking, insurance and investment) –that had provided a channel for more formalcommunication between the ombudsman serviceand the industry since 2000 – with a small crosssectorindustry steering group and a wider crosssectorindustry panel.These changes involved our chairman,Sir Christopher Kelly, chairing the high-levelsteering group which brought together eight chiefexecutives of key financial services institutions.Through this group, and in other high-levelindustry meetings, we have discussed strategicissues such as major trends in complaints and themechanisms for handling “mass claims”from consumers.Membership of the wider cross-sector industrypanel includes all the organisations previouslyrepresented on the three former industry liaisongroups– with additional members from consumercredit, electronic money and payment services.The industry panel comprises around 200financial services practitioners and officials from30 trade associations. The panel covers issuessuch as complaints involving a particular product,sector, or type of financial business – or particularcomplaints-handling process issues.We keep in regular contact with the industrypanel through a fortnightly email newsletter anda series of events, including specialist seminarson complaints-related topics and meet theombudsman Q&A sessions.“… we have more formal arrangements for strategicdialogue with the financial services industry”Annual Review 2010 | 2011

124Financial Ombudsman Serviceother work we have done16,706enquiries to our technical advice desk675parliamentary enquiriesand taking part in over 200seminars and events700,000copies of ourconsumer leaflet and 2,073 new orupdated pages on our websiteAnnual Review 2010 | 2011

Financial Ombudsman Service125other workwe have doneAnnual Review 2010 | 2011

126Financial Ombudsman Serviceother work we have doneTo support our work in settling disputesbetween consumers and businesses providingfinancial services, we feed back the lessonslearned from our work to a wide range ofstakeholders and customers.This section highlights some of these stakeholderengagementactivities. There is more informationabout this work in our corporate plan, publishedin January each year (and available in the“publications” section of our website).working with the FSA and OFTWe have regular contact both with the FinancialServices Authority (FSA), as the regulator offinancial services, and the Office of Fair Trading(OFT), as the regulator of consumer credit,on matters which are relevant to our role andresponsibilities.In particular, during the year we worked with FSAon the consultation paper, CP10/21 – consumercomplaints (award limit and changes to complainthandling rules), which included proposals toraise the maximum amount of compensation thatthe ombudsman can tell a business to pay from£100,000 to £150,000. The consultation paperalso proposed some rule changes – to improvebusinesses’ complaints-handling processes –and it asked for evidence on whether our eligibilityrules for complainants should be extended tocover victims of identity theft.Following on from feedback to the discussionpaper, DP10/1 – consumer complaints (emergingrisks and mass claims), which we producedjointly with the FSA and the OFT, we have workedwith those two regulators to replace the processfor dealing with issues which may have widerimplications for consumers or businesses witharrangements which include a joint FSA, OFT andombudsman co-ordination committee.extensions to our remitWe worked closely with HM Treasury and theFSA during the year, to enact the new “rulesinstrument” required for implementing the secondElectronic Money Directive on 30 April 2011.We will continue to work with HM Treasury, the FSAand the OFT on five further changes or extensionsto our remit:■ HM Treasury and the Department for Trade,Enterprise and Investment in Northern Irelandare considering bringing the regulation ofcredit unions in Northern Ireland under the FSA.This will in turn bring these credit unionswithin our jurisdiction.■ The European Directive that updates thearrangements for “UCITS” (Undertakings forCollective Investment in Transferable Securities)will, for the first time, create the possibility of afund authorised in one EU member state beingmanaged by a fund manager authorised inanother member state. The implications of thisfor the scope of our jurisdiction are currentlyunder review.■ The transfer of the regulation of second-chargemortgages from the OFT to the FSA.■ HM Treasury are looking to extend the FSA’sregulatory powers to cover the exercise of rightsin relation to the onward sale of mortgagebooks – rather than just the administration ofthem. In turn, this would bring complaints aboutthese wider activities within our jurisdiction.■ HM Treasury are also looking to extend thescope of the FSA’s regulatory powers to a widerrange of “sale and rent-back” providers, whowould then come under our jurisdiction for thefirst time.Annual Review 2010 | 2011

Financial Ombudsman Serviceother work we have done127regulatory reviewThe government made the reform of financialregulation one of its key priorities, and it has setout proposals for a new regulatory framework.Building on its consultation document of July2010, it published A new approach to financialregulation: building a stronger system in February2011. This confirmed the government’s intentionthat the ombudsman service would remainindependent, with a role clearly distinct fromthe regulator.We will continue to work closely with HM Treasuryand the FSA on issues arising from regulatoryreform which might affect our work.national and international roleWe continue to maintain close relations with anumber of government departments that havea particular interest in what we do – includingHM Treasury, the Department for Business,Innovation and Skills (BIS) and the Ministryof Justice.At an international level, we have continued towork with the European Commission on improvingthe availability of cross-border “alternativedispute resolution” (ADR), primarily through FIN-NET, the network of European financial-disputeresolution services. We have also worked withthe Commission as it prepares a proposal for newlegislation on “alternative dispute resolution”.freedom of informationThe Ministry of Justice confirmed in January2011 that the Freedom of Information Act will beextended to cover the ombudsman service witheffect from October 2011. While not currentlysubject to this Act, we aim to answer questionsabout our work as though we were – in addition topublishing extensive information on our websiteabout what we do and how we do it.In its February 2011 consultation paper on a newapproach to financial regulation, the governmentsaid it wanted to clarify that the ombudsmanservice could publish its decisions in aproactive and co-ordinated way. We will beworking with our stakeholders to consider howthis may be put into practice.external reviewThree years on from the publication of the reportfrom our last external review – carried out byLord Hunt of Wirral into the accessibility andtransparency of our service – the ombudsmanservice has asked the National Audit Office (NAO)to look at our efficiency. The first stage of theNAO’s work started at the beginning of April 2011.This involved a scoping study, as a result of whichthe NAO will recommend to our non-executiveboard the particular areas on which the reviewshould focus.“... the arrangements include a joint FSA,OFT and ombudsman co-ordination committee”Annual Review 2010 | 2011

128Financial Ombudsman Serviceother work we have doneengaging with stakeholdersWe carry out a wide range of activities aimed atsharing our experience and knowledge with theoutside world. Over the year these external-liaisonand outreach activities have included:■ Dealing with 16,706 enquiries to our technicaladvice desk – our dedicated service for peoplehandling complaints in the financial servicessector and the consumer-advice world.■ Handling 675 parliamentary enquiries and34 ministerial questions, and producing aspecial mini-guide to our service for electedrepresentatives such as MPs and councillors.■ Organising visits, meetings and training forbusinesses we cover – including a relationshipmanagementprogramme involving the35 financial services groups that togetheraccounted for 85% of complaints referred tothe ombudsman service during the year.■ Running our industry steering-group andour industry panel (see page 123); hostingour smaller-businesses forum; and holdingworkshops and seminars around the UK forfinancial businesses and claims-managementcompanies on a range of topical complaintsrelatedissues.■ Holding 17 regional training-days forcommunity and advice workers – from Plymouthto Glasgow, Belfast to King’s Lynn – to shareour complaints-handling skills with front-lineproblem-solvers in the community; and hostingour quarterly consumer-liaison forum forrepresentatives from consumer groups.■ Taking our exhibition stand to key consumerevents, including the Caravan and MotorhomeShow, the Gadget Show Live, the Balmoralagricultural show in Belfast and the WelshNational Eisteddfod.■ Speaking at seminars and conferences hostedby organisations ranging from the Associationof Professional Compliance Consultants to theMoney Advice Trust.■ Targeting specific audiences – those lesslikely to use, or be aware of, the ombudsmanservice – including advertising on undergroundstations in Glasgow, on buses in NorthernIreland, in the South Wales Argus and on theOneIndia website.■ Adding or updating 2,073 pages of our website– including 143 news updates, increased videocontent, and more feedback channels for userratings and comments.■ Publishing 10 issues of our newsletter,ombudsman news; distributing 700,000copies of our consumer leaflet, your complaintand the ombudsman; and handing out 3,000copies of our mini-guide for community adviceworkers, 3,000 copies of our guide for smallerbusinesses and 4,000 EasyRead leaflets.■ Answering media questions and providinginformation for publications ranging fromFarmers Weekly to Structured Productsmagazine – and taking part in over 50broadcasts, from Radio 1 Newsbeat toSunny Govan community radio .“... we advertised on underground stationsin Glasgow and on buses in Northern Ireland”Annual Review 2010 | 2011

Financial Ombudsman Service129our news updatesAnnual Review 2010 | 2011

130Financial Ombudsman Serviceour news updatesour plans and budget for 2011/201230 March 2011we publish our finalised budget for the financialyear 2011/2012 – including a summaryof responses to our consultation paper –together with our plans for a changing worldstrengthening co-ordination between the FSA,the OFT and the ombudsman service28 March 2011a new co-ordination committee – involvingthe FSA, the OFT and the ombudsman service –replaces the “wider implications” processcar insurance question-time for businesses24 March 2011the ombudsman hosts a seminar and questiontimefor insurance practitioners – on theombudsman’s approach to disputes involvingrepairs and vehicle theft“handling complaints” conferencein Manchester22 March 2011the ombudsman runs the latest in its series ofconferences for financial-services complaintshandlers – with an event for over 65 industrypractitioners in Manchester – covering topicssuch as good practice in complaints handling,compensation for being “deprived” of moneyand for investment loss, and compensation fordistress and inconveniencemeeting smaller businesses in Southampton18 March 2011our lead ombudsman, Caroline Mitchell, explainsthe role of the ombudsman – and how handlingcomplaints well is part of good customer service– to representatives from 80 smaller businessesin the Southampton area, including motor traders,insurance brokers and financial adviserspet insurance complaints17 March 2011dealing with over 400 complaints a year aboutinsurance for pets, the ombudsman service setsout its general approach to pet insurance, as partof its online technical resourceraising the standard for an inclusive service15 March 2011as part of our commitment to accessibility,the ombudsman service hosts a seminar –on “identifying and responding to consumervulnerability” – to support the launch of theBritish Standards Institution’s new standard,BS 18477, on the provision of inclusive servicescomplaints about banks in Northern Ireland15 March 2011David Cresswell from the ombudsman serviceis interviewed by BBC Northern Ireland’s TheStephen Nolan Show – about what consumersshould do if they are unhappy with their bank andwant their complaint taken seriously“introducing the ombudsman” to businessesin Belfast11 March 2011our lead ombudsman, Caroline Mitchell, hosts aseminar in Belfast for smaller businesses who areless likely to get complaints or have direct contactwith the ombudsman servicerecruiting ombudsmen10 March 2011appropriately qualified and experiencedexperts are invited to join our ombudsman panel –as demand rises from consumers and businessesfor formal ombudsman decisions as the finalappeal-stage of our complaints procedure“accessibility and transparency” – latest update10 March 2011three years on from Lord Hunt’s review into theaccessibility and transparency of the ombudsmanservice, we publish our latest update on openingup and reaching out to customersAnnual Review 2010 | 2011

Financial Ombudsman Serviceour news updates131international women’s day8 March 2011with International Women’s Day championingthe rights and empowerment of women,the ombudsman continues to work in partnershipwith Savvywoman, Black Hair magazine andother relevant media, to raise awareness ofthe ombudsman service with women“finders keepers”?4 March 2011our latest update on our online technical resourcesets out our approach to banking disputes wherepayments have been credited to the wrongaccount (or released to the wrong person)– and explains why it’s unlikely to be a caseof “finders keepers”ombudsman releases latest complaints dataon individual financial businesses28 February 2011“cheque” you know your rights25 February 2011the latest ombudsman feature in Choice magazine– the lifestyle magazine for people over 50 –focuses on cheques and how to avoid beingcaught out by fraudstersmortgage arrears and hardship24 February 2011the latest addition to our growing online technicalresource sets out our general approach to themany disputes we see where a consumer has haddifficulty paying their residential mortgage –and arrears have built up as a resultMoney Box Live and investments23 February 2011David Cresswell from the ombudsman servicetakes part in a Money Box Live phone-in on BBCRadio 4 – on investment-related issuesmarine insurance17 February 2011dealing with up to a hundred disputes a yearinvolving insurance for boats, we set out ourgeneral approach to complaints about marineinsurance as part of our expanding onlinetechnical resourceombudsman news issue 9210 February 2011■ a selection of recent insurance disputes overthe way claims are settled■ a snapshot of the ombudsman’s complaintsfigures for the third quarter of the financial year■ Natalie Ceeney, chief ombudsman, on thecurrent situation with complaints aboutpayment protection insurance (PPI) – and theimpact of this on the ombudsman servicecomplaints-handling training for advice workersin County Durham9 February 2011the ombudsman service runs the latest in itsseries of training-days for community advisers –with an event for front-line community workersin County Durham, run in association with EastDurham Citizens Advice Bureauombudsman awareness on the up3 February 2011the ombudsman is continuing its work withBlack Hair and Pride magazines to ensure thatawareness of the ombudsman service among theBlack African and Caribbean community continuesat its record high“judicial review” on payment protectioninsurance (PPI)25 January 2011the legal challenge brought by the British BankersAssociation (BBA) – against the FSA and theFinancial Ombudsman Service – starts in theHigh Court todayAnnual Review 2010 | 2011

132Financial Ombudsman Serviceour news updatesboard appointments21 January 2011The Asian Today14 January 2011the ombudsman features in the latest issueof The Asian Today – the free monthlynewspaper for consumers in the Midlands –as part of its continued awareness-raisingwork with Asian consumersfinancial ombudsman consults on its plansand budget for the year ahead10 January 2011stockbroking complaints5 January 2011dealing with some 2,500 stockbroking andportfolio-management disputes a year, theombudsman service publishes its approachto complaints involving stocks and shares,“execution-only” sales and portfoliomanagementagreements – as part of theombudsman’s online technical resourceholidays without the hassle31 December 2010the latest ombudsman column in Choicemagazine – the lifestyle magazine for peopleover 50 – focuses on how people taking awinter-break holiday can avoid insuranceproblemsstudent Grit in the Midlands15 December 2010the ombudsman features in the launch issue ofGrit magazine – the lifestyle magazine providinginformation for students and younger peoplein the Midlands – as part of the ombudsman’songoing work to raise awareness of how it canhelp get financial problems sortedombudsman news issue 9114 December 2010■ case studies where the consumer is indispute with a financial business and alsowith a family member■ commonly-held myths about theombudsman service■ Natalie Ceeney, chief executive and chiefombudsman, on taking a clear look at whatgreater transparency really meansfrom Conwy to Cardiff7 December 2010following our involvement in this year’s Eisteddfodand increased regional media coverage, one infive people in Wales can now actively name theombudsman service as the organisation thatgets financial problems sortedonline technical resource2 December 2010further information is added to the ombudsmanservice’s online technical resource – covering theombudsman’s approach to insurance complaintsinvolving accidental damage and extended warrantiescommunity advice in Essex30 November 2010the ombudsman service runs the latest in itsseries of training days for community and adviceworkers – with an event for consumer andvoluntary groups in EssexTreasury Select Committee evidence26 November 2010as part of its inquiry into financial regulation, theCommons Treasury Committee publishes furtherwritten evidence – including supplementaryinformation from the ombudsman service,following initial written evidence and oral evidencegiven on 14 October by chief ombudsman, NatalieCeeney, and principal ombudsman, Tony BoormanAnnual Review 2010 | 2011

Financial Ombudsman Serviceour news updates133into 2011 with Zee26 November 2010the ombudsman features in the winter issueof ZEE magazine – as part of its continuedawareness-raising work with Asian consumersombudsman forum for smaller businesses25 November 2010the ombudsman service hosts a forum –attended by representatives from 14 smallerbusinesstrade-associations – as part of itswork handling complaints both from andabout smaller businesses“can’t pay, won’t pay – and now no need to pay”?24 November 2010Jane Hingston, lead ombudsman, takes part asa panellist in the question-time session at theannual conference of the Money Advice LiaisonGroup (MALG) – focusing on different types ofdebt experience, as well as on issues of financialhardship and unaffordable lendingspread-betting complaints22 November 2010with the ombudsman service likely to deal withover 200 spread-betting complaints this financialyear, we publish our approach to disputesinvolving spread-betting and contracts fordifference (CFDs) – as part of our expandingonline technical resourcehousehold insurance question-timefor businesses18 November 2010the ombudsman today hosts a seminar andquestion-time for insurance practitioners – onthe ombudsman’s approach to disputes involvingcontents insurance and buildings insurancecomplaints-handling training for adviceworkers in the south east17 November 2010the ombudsman service runs the latest in itsseries of training-days for community advisers– with a training day for front-line communityworkers in Newburycomplaints-handling training for adviceworkers in the North West10 November 2010the ombudsman goes to Liverpool to providecomplaints-handling training for communityand advice workersombudsman news issue 909 November 2010■ recent vehicle-related case studies■ banking disputes involving powers of attorney■ a snapshot of our complaint figures for Julyto September 2010■ Natalie Ceeney, chief executive and chiefombudsman, on why customer complaintscan be good news for businessestransfers, payments and cheques5 November 2010the ombudsman service’s online technicalresource is further expanded with informationabout the ombudsman’s general approach tobanking transfers, payments and chequeskeep on top of credit4 November 2010the ombudsman focuses on credit in thelatest issue of Retirement Today – the lifestylemagazine for people approaching or enjoyingretirement – featuring information on therole of the ombudsma nAnnual Review 2010 | 2011

134Financial Ombudsman Serviceour news updatessubsidence1 November 2010the ombudsman service’s online technicalresource is further expanded with informationabout the ombudsman’s general approach tobuildings insurance disputes involving subsidence“handling complaints” conference27 October 2010over a hundred financial services practitionerstake part in the ombudsman’s conference forcomplaints handlers in London – covering topicssuch as compensation for distress, inconvenienceand other non-financial loss; and good practice incomplaints handlingnew publication aimed at councillors and MPs22 October 2010following positive feedback on our mini-guidefor advice workers, the ombudsman producesa similar mini-guide for elected representatives– giving a brief introduction to the role of theombudsman for councillors, MPs etcchief ombudsman on learning from complaints21 October 2010chief ombudsman, Natalie Ceeney, speaks to theInsurance Institute of London about learning fromcomplaintsAde Adepitan and disability awarenessat the ombudsman20 October 2010wheelchair basketball player Ade Adepitan –gold-medallist at the 2005 Paralympic WorldCup – visits the ombudsman service to launch theombudsman’s latest disability-awareness andcustomer-service programme – run in partnershipwith eight disability, mental health and wellbeingcharities, including the Samaritans, BritishDyslexia Association and Alzheimer’s Societyfinancial mutuals, complaints andthe ombudsman19 October 2010chief ombudsman, Natalie Ceeney, speaks atAssociation of Financial Mutuals conference onwhy effective and well-managed complaintshandlingis crucialTreasury Select Committee14 October 2010chief ombudsman, Natalie Ceeney, and principalombudsman, Tony Boorman, go to Parliament– to give evidence to the Treasury SelectCommittee as part of its inquiry into financialregulation ombudsmanon the road12 October 2010the ombudsman takes part in the InternationalCaravan and Motorhome Show at BirminghamNEC – to raise awareness of the service and helpconsumers nip problems in the bud relating tocaravan insurance and goods bought with creditback to college and university11 October 2010the ombudsman features in this year’s What’sOn student guide and the latest issues ofSource and End of Term – lifestyle magazinesproviding information for students on a range ofareas, including money matters – as part of theombudsman’s ongoing awareness-raising workwith younger people and studentstravel insurance complaints in Northern Ireland11 October 2010the ombudsman service’s David Cresswell takespart in BBC Radio Ulster’s round-table on travelinsurance complaintsAnnual Review 2010 | 2011

Financial Ombudsman Serviceour news updates135legal action on payment protection insurance (PPI)8 October 2010the ombudsman will continue as normal tohandle consumers’ complaints about paymentprotection insurance – despite the legal action(“judicial review”) launched today by the BritishBankers Association (BBA) against the FSA andthe Financial Ombudsman Service on theapproach to PPI complaints handling“introducing the ombudsman” to businessesin Manchester8 October 2010the ombudsman is in Manchester hosting anotherin our series of regional events for smallerbusinesses – who are less likely to get complaintsor to be aware of the role of the ombudsman aspart of the complaints procedurehandling health insurance complaints7 October 2010lead ombudsman, Caroline Mitchell, talks abouthealth insurance complaints – to insurancebrokers and IFAs at the Cover Protection andHealth Insurance Forumworking with community advisers in Scotland6 October 2010the ombudsman service runs the latest in itsseries of events for advice workers – with atraining-day in Edinburgh for front-linecommunity workersombudsman news issue 895 October 2010■ complaints involving legal expenses insurance■ disputed debit card transactions■ an interview with our new operations director,Simon Rouse■ Natalie Ceeney, chief executive and chiefombudsman, on the next stages in our annualplanning cycleblack history month4 October 2010as part of the ombudsman service’s ongoingwork to raise awareness of the service withthe Black African and Caribbean community,the ombudsman is working in partnership withkey lifestyle magazines Pride and Black HairFSA consults on changes to complaintshandlingrules30 September 2010the Financial Services Authority (FSA), the regulator,consults on changes to the complaints-handlingrules as part of a package of measures to driveup standards of complaints handling by financialbusinesses – including proposals to raise themaximum compensation the ombudsman can tellbusinesses to pay, from £100,000 to £150,000regional radio and the ombudsman30 September 2010the ombudsman service’s Emma Parker isinterviewed by BBC Radio Devon and RadioPlymouth – highlighting the role of theombudsman service to listeners in south westPlymouth training day30 September 2010the ombudsman service runs the latest in itsseries of training-days for community and adviceworkers around the UK – with an event forconsumer and voluntary groups in the South West“ask the expert”29 September 2010the ombudsman service’s Peter Cook joins theexpert panel of Savvywoman – the money matterswebsite for women – providing information to helppeople nip financial complaints in the budconsumer credit conference28 September 2010the ombudsman speaks at LexisNexis’ consumercreditlaw conference – about complaints involvingpayment protection insuranceAnnual Review 2010 | 2011

136Financial Ombudsman Serviceour news updatesnon-executive directors being recruited27 September 2010applications are invited from appropriatelyexperienced and qualified candidates to jointhe board of the Financial Ombudsman Serviceas non-executive directorsdisputed transactions27 September 2010information about the ombudsman’s approachto resolving complaints about disputedtransactions – involving plastic cards, chequesand internet banking – is added to the onlinetechnical resourcePPI complaints23 September 2010with complaints about payment protectioninsurance (PPI) continuing to make up a largeproportion of the ombudsman’s workload,the ombudsman hosts a forum for financialbusinesses dealing with PPI complaints –to set out the ombudsman’s long-publishedapproach to PPIworking with community advisers in King’s Lynn22 September 2010the ombudsman service runs the latest inits series of events for advice workers – witha training day in King’s Lynn for front-linecommunity workers across NorfolkBBC Radio Newcastle21 September 2010the ombudsman service’s Emma Parker isinterviewed on BBC Radio Newcastle, providinginformation on the role of the ombudsman tolisteners in the north eastmotor insurance: repairs to vehicles16 September 2010our online technical resource is further expanded– with information about the ombudsman’sapproach to complaints where consumers areunhappy with how an insurer has handled therepair of their vehicleombudsman releases latest complaints data onindividual financial businesses14 September 2010ombudsman at Citizens Advice annualconference14 September 2010the ombudsman service takes part in the CitizensAdvice annual conference in York – to highlightthe ombudsman’s role and resources available tofront-line advice workers“introducing the ombudsman” to businessesin Birmingham13 September 2010the ombudsman is in Birmingham hosting anotherin our series of regional events for smallerbusinesses – who are less likely to get complaintsor to be aware of the role of the ombudsmanas part of the complaints procedureback to school10 September 2010the ombudsman features in the latest issue ofEvery Child – the annual guide for parents withchildren starting school in England and Wales– as part of its outreach work with young familiescomplaints-handling training for advice workersin the North East9 September 2010the ombudsman goes to Newcastle to providecomplaints-handling training for communityand advice workersfinancial hardship and unaffordable lending9 September 2010our online technical resource is furtherexpanded with information about theombudsman’s approach to complaints involvingfinancial hardship and unaffordable lendingrelated to consumer debt (for example,current account overdrafts, credit card debts,loans and hire purchase)Annual Review 2010 | 2011

Financial Ombudsman Serviceour news updates137Citizens Advice Scotland1 September 2010the ombudsman takes part in Citizens AdviceScotland’s annual conference – as part of its workwith front-line community and advice workersombudsman news issue 8831 August 2010■ disputes over the quality of repairs arranged aspart of an insurance claim■ a reminder of our approach to mortgageunderfundingcomplaints■ complaints data – how, why and what we will bepublishing this September■ Natalie Ceeney, chief executive and chiefombudsman, taking stock of recent trends inour workload – and focusing on our strategicplans for the futureBradford Community Broadcasting26 August 2010the ombudsman service’s Emma Parker isinterviewed on the drive-time show on BradfordCommunity Broadcasting Radio – providinginformation on the role of the ombudsman tolisteners in Yorkshire and the Humber“subject access requests”25 August 2010as part of the section of our website on “freedomof information and data protection”, we explainhow people can access personal informationabout them that we process as part of our work –by making a “subject access request” under theData Protection Actdon’t get caught out at the cashpoint19 August 2010the ombudsman features in the latest issueof Retirement Today – focusing on cashpointcomplaints, including top tips on how to avoidgetting caught out when you take cash outNational Complaints Day13 August 2010the ombudsman takes part in this year’sNational Complaints Day, giving tips on howto nip a financial problem in the bud and getyour complaint taken seriouslywarning! fraudulent emails claiming to be fromthe ombudsman ...11 August 2010training for Glasgow advice workers11 August 2010our latest regional-training day for front-lineadvice and community workers takes place todayat Hampden Park, Scotland’s national stadiumFSA and payment protection insurance (PPI)10 August 2010the Financial Services Authority (FSA) confirms apackage of measures on PPI – including guidanceto ensure complaints are handled properly in linewith the ombudsman’s approachIn the Money6 August 2010the ombudsman features in the first issue ofIn the Money in County Durham – the moneyadvice guide for consumers living in the North-East – as part of our ongoing work to raiseawareness of the ombudsman serviceEisteddfod!2 August 2010am y tro cyntaf, bydd gwasanaeth yr ombwdsmonyn cymryd rhan yn Eisteddfod Genedlaethol Cymruym Mlaenau Gwentfor the first time, the Financial OmbudsmanService is taking part in the National Eisteddfodof Wales Festival in Blaenau GwentAnnual Review 2010 | 2011

138Financial Ombudsman Serviceour news updatestechnical information on calculatingcompensation2 August 2010our online technical resource is further expandedwith information about the ombudsman’sapproach to calculating compensation forbeing “deprived” of moneyombudsman news issue 8729 July 2010■ insurance case studies involving travelor holidays■ cases where a bank incorrectly credits anaccount with money meant for someone else■ a snapshot of our complaint figures for thefirst quarter of this financial year■ Natalie Ceeney, chief executive and chiefombudsman, on the information and insightto be gleaned from customer complaint sno such thing as free cash29 July 2010David Cresswell from the ombudsman service isinterviewed on BBC Radio 2 about cases wheremoney is mistakenly credited to bank accountstraining for South Wales advice workers29 July 2010the ombudsman service runs the latest in itsseries of training-days for community and adviceworkers in SwanseaSwansea complaints-clinic28 July 2010Emma Parker from the ombudsman serviceis interviewed by radio stations SwanseaSound and The Wave about the ombudsman’sdrop-in complaints-clinic for consumers in SwanseaBBC’s “travel week” and the ombudsman27 July 2010as part of the BBC’s “travel week”,the ombudsman service’s Emma Parker isinterviewed by Radio 1 Newsbeat and BBCWorking Lunch – providing information onthe role of the ombudsman and how to geta travel-related problem sortedManchester training day23 July 2010the ombudsman service runs the latestin its series of training-days for communityand advice workers around the UK – with anevent for consumer and voluntary groupsin the Manchester areaFinancial Ombudsman Service appointsSimon Rouse as operations director21 July 2010payment protection insurance (PPI) case studies20 July 2010we update our online PPI resource withfurther case studies – showing our approach tocomplaints about the sale of regular-premiumcredit card PPItravel and credit cards19 July 2010the ombudsman is interviewed by BBC’s The OneShow about holidays taken out on credit cards– and what to do if something goes wrongBBC Radio Wales19 July 2010the ombudsman service’s Emma Parker isinterviewed as part of BBC Radio Wales’ focus onbanks and customer service – with information onthe role of the ombudsman and how consumerscan get problems sortedAnnual Review 2010 | 2011

Financial Ombudsman Serviceour news updates139in retirement16 July 2010meet the ombudsman at the Retirement Showat London Olympia – with Peter Cook from theombudsman service on the Your Money Matterspanel chaired by Sarah Pennells of SavvywomanMoney Box, the ombudsman and “continuouspayment authorities”10 July 2010the ombudsman service’s David Cresswell isinterviewed on BBC Radio 4’s Money Box aboutproblems consumers bring to the ombudsmaninvolving automatic payments made by“continuous-payment authorities”insurance complaints8 July 2010lead ombudsman, Caroline Mitchell, speaksto representatives from across the insuranceindustry at the Association of British Insurers’complaints-management seminartechnical data on redress for mis-sold pensions7 July 2010technical note updated with new assumptions(as from 1 July 2010) for calculating redress formis-sold pensionshandling customer complaints5 July 2010lead ombudsman, Caroline Mitchell, speaks atthe Complaints in Financial Services event – onhandling complaints and the information availableto businesses about the ombudsman’s approachombudsman recruitment4 July 2010applications are invited from appropriatelyqualified and experienced experts to join thestatutory ombudsman panel – helping to provideadditional flexibility and resource in dealing withthe rising demand for ombudsman decisionsombudsman events for businesses1 July 2010the ombudsman launches its new series ofevents for businessesstudent money advice28 June 2010the ombudsman takes part in the nationalconference of the Association of Student MoneyAdvisers in Brighton – as part of work to helpmake the ombudsman more relevant to youngerconsumers who complain less and have leastknowledge of their consumer rightsombudsman news issue 8623 June 2010■ misunderstandings about claims made undersection 75 of the Consumer Credit Act■ some recent recession-related insurancecomplaints■ our latest annual review in a nutshell – the factsand figures we are most often asked about■ Natalie Ceeney, after three months as chiefexecutive and chief ombudsman, planning forthe ombudsman’s next 10 yearstraining for South East advice workers23 June 2010in partnership with Ashford Borough Council,our latest regional training-day for front linecommunity and advice workers takes place todayMoney Advice Scotland22 June 2010Natalie Ceeney, chief executive and chiefombudsman, gives a keynote speech to frontlinemoney advisers at Money Advice Scotland’sannual conference in CrieffAnnual Review 2010 | 2011

140Financial Ombudsman Serviceour news updatesFamily Life18 June 2010following on from National Family Week earlier thismonth, the ombudsman features in the latest issueof Family Life – the lifestyle magazine providing tipsand information for parents in Scotlandbanking and credit complaints17 June 2010lead ombudsman, Jane Hingston, hosts aseminar for businesses – to discuss complaintsinvolving goods and services paid with creditand consumers who are in financial difficultiestalking about money problems15 June 2010the ombudsman takes part in the TradingStandards Institute’s annual conferencein Edinburgh – to talk about the problemsconsumers in financial difficulties facesummer with ZEE11 June 2010the ombudsman service features in the summerissue of ZEE magazine as part of its continuedawareness-raising work with Asian consumersPPI case studies10 June 2010we update our online PPI resource with a rangeof recent case studies – showing our approach tocomplaints about the sale of payment protectioninsurance (PPI)training for West Midlands advice workers10 June 2010our latest regional-training day for front-lineadvice and community workers takes placein Wolverhamptonmeeting the ombudsman in Edinburgh8 June 2010lead ombudsman, Caroline Mitchell, talks tosmaller financial businesses about handlingcomplaints and the work of the ombudsman– at our introducing the ombudsman seminarin Edinburghworking together4 June 2010the ombudsman adds new dates to its seriesof regional events, aimed at giving adviceworkers the opportunity to learn more aboutthe ombudsman service and how we workVolunteer Week3 June 2010the ombudsman service is proud to support itsstaff who volunteer for a wide-range of charitiesand community groups – at both a national andlocal level – as part of Volunteer Weekon the front-line in Barrow in Furness28 May 2010the ombudsman’s outreach team takes partin a regional training-day run by Consumer Directfor community and advice workers in the Barrowin Furness areatemporary PPI rule28 May 2010FSA introduces a temporary rule – to give peoplewith recent payment protection insurance (PPI)complaints more time to refer cases to theombudsman servicenew independent assessor appointed24 May 2010we’re planning for our next decade ...21 May 2010chief ombudsman, Natalie Ceeney, on video– talking about change, challenge and newrecruitment opportunities on the senior teamat the ombudsman servic eAnnual Review 2010 | 2011

Financial Ombudsman Serviceour news updates141ombudsman service publishes annual reviewof personal finance disputes19 May 2010PINs in Northern Ireland15 May 2010David Cresswell from the ombudsman servicejoins Linda McAuley of BBC Northern Ireland’sOn Your Behalf – and consumers visiting theombudsman’s stand at Belfast’s Balmoralagricultural show – to talk about problems withPINs and plastic cardsBelfast Balmoral Show13 May 2010the ombudsman takes part in Northern Ireland’slargest agricultural show – as part of our ongoingwork to raise consumer awareness of theombudsman serviceNorthern Ireland radio12 May 2010Emma Parker from the ombudsman service isinterviewed on BBC Radio Foyle and Radio WestQ101.2FM, to help raise awareness of the serviceand its work in Northern Irelandtraining for advice workers in Northern Ireland11 May 2010our latest regional training-day for front-lineadvice workers takes place in Belfast – as part ofour Northern Ireland focusmoney advisers in Harrogate10 May 2010the ombudsman joins delegates in Harrogatefor the annual conference of the Institute ofMoney AdvisersNorthern Ireland focus 20105 May 2010working alongside front-line consumer-adviceagencies in Omagh and Belfast, the ombudsmanservice takes part in drop-in clinics – for consumerswho have a problem they can’t sort out witha financial businessassessing investment suitability –and “with-profits” bonds4 May 2010our online technical resource is furtherexpanded – with information on our approachto “with-profits” bonds and assessing thesuitability of investmentsombudsman news issue 8529 April 2010■ recent banking, insurance and investmentcomplaints from consumers living in ruralcommunities■ an expanded Q & A section covering some recentdevelopments in our casehandling process■ the ombudsman’s consumer-outreach work■ chief executive and chief ombudsman, NatalieCeeney, on her first month at the ombudsmanservice – and some challenges aheadombudsman’s newly-established industrysteering-group meets for first time28 April 2010Radio 4 Money Box and how to complain28 April 2010David Cresswell from the ombudsman servicetakes part in a Money Box Live discussion onhow to complaintraining for advice workers in York27 April 2010our latest regional training-day for front-lineadvice workers takes place in York – as partof our outreach work with trusted advisersin the communityYou and Yours on mortgage complaints, claimsmanagementcompanies and the ombudsman26 April 2010David Cresswell from the ombudsman servicetalks on Radio 4 You and Yours about whatconsumers should do if they think they’vebeen mis-sold a mortgageAnnual Review 2010 | 2011

142Financial Ombudsman Serviceour news updatesombudsman and travel insurance intermediaries21 April 2010Tony Boorman, principal ombudsman, speaks atthe Association of Travel Insurance Intermediaries’annual conferenceombudsman at Naidex independent living show20 April 2010the ombudsman takes part in the Naidex showat Birmingham NEC – as part of our ongoingwork to raise awareness of our service withdisabled consumerscomplaints handling and banks19 April 2010Tony Boorman, principal ombudsman,speaks at the British Bankers Association’scomplaints seminarBBC Money Talk with Natalie Ceeney15 April 2010new chief executive of the ombudsman service,Natalie Ceeney, explains to BBC online whatconsumers can do if things go wrong and theywant to complain about financial serviceslooking forward9 April 2010the ombudsman features in the latest editionof Forward – the Spinal Injury Association’smagazine providing advice to people with spinalcord injuries – as part of the ombudsman’songoing work to raise awareness of the servicewith disabled consumersgadgets and gizmos7 April 2010meet the ombudsman at the Gadget Show Liveat Birmingham NEC – part of the ombudsman’soutreach-work with younger people who spend alot, borrow more on credit, and have the lowestawareness of how to sort out financial problemsaccessibility and transparency – latest update1 April 2010two years after Lord Hunt completed his reviewinto the accessibility and transparency of theombudsman service, the ombudsman publishesits latest quarterly update on progress made onopening up and reaching out to customersAnnual Review 2010 | 2011

Financial Ombudsman Service143our boardand senior peopleAnnual Review 2010 | 2011

144Financial Ombudsman Serviceour board and senior peopleour boardSir Christopher Kelly KCBchairman● chairman of the King’s Fund● chairman of the Committee onStandards in Public Lifeformerly● chairman of NSPCC● permanent secretary at theDepartment of Health● head of policy at the Departmentof Social Security● director of monetary & fiscalpolicy and director of the budget& public finances at HM TreasuryAlan Cook CBE● a non-executive board memberat the Department for Transport● non-executive chair of theHighways Agency board● a non-executive director of theboard of the Office of Fair Trading(OFT)● chairman of “Action for ME”formerly● managing director ofPost Office Ltd● chief executive of NationalSavings and Investments (NS&I)● chief operating officerat PrudentialDame Janet Gaymer DBE QC (Hon)● governor of the London Schoolof Economics● member of the Council of Justice● member of the board ofInternational Women of Excellence● life vice-president of the UKEmployment Lawyers’ Associationformerly● Commissioner for PublicAppointments in England & Wales● senior partner at Simmons& SimmonsAlan Jenkins● partner & chairman of globalmarkets at Eversheds LLP● a non-executive board memberof UK Trade & Investment● chairman of the board of trusteesof Mencap Trust Company Limited● vice chairman of the InternationalInstitute for Environment &Development● chairman of the board of trusteesof Lattitude Global Volunteeringformerly● chairman of the board ofEversheds LLP● managing director of FrereCholmeley Bischoff● governor of Bishop GilpinPrimary SchoolProfessor Elaine Kempson CBE● emeritus professor at theUniversity of Bristol● consultant for the World Bank● a member of the Social SecurityAdvisory Committeeformerly● a member of the FinancialInclusion Taskforce● a member of the DTI taskforceon over-indebtedness● a member of the DTI foresightsub-panel on personal financialservices● a member of a Treasury policyaction team on access to financialservices● adviser to the Thoresen reviewof generic financial advice● a non-executive director ofthe Department for Work andPensions’ Pensions Client Boardas at 31 March 2011Annual Review 2010 | 2011

Financial Ombudsman Serviceour board and senior people145Kate Lampard● chair of NHS South East Coast● a trustee of Esmée FairbairnFoundationformerly● chair of Kent and MedwayStrategic Health Authority● chair of the Independent HousingOmbudsman Limited● chair of the Invicta CommunityCare NHS Trust● an associate of Verita Limited,consultants in incidentinvestigations and inquiries● a non-executive director ofRHS Enterprises LtdJulian Lee● chair of Brighton & SussexUniversity Hospitals Trust● a commissioner at the LegalServices Commission● a non-executive director of theMaritime and Coastguard AgencyAdvisory Board● Justice of the Peace to the NorthSussex Bench● crisis & change managementconsultantformerly● interim chair of NHS Surrey● chair of NHS Brighton & Hove● a non-executive director of theSouth East Coast Ambulance Trust● chairman, then chief executive,of the Allied Carpets Group● joint managing director of British& Commonwealth Holdings plcRoger Sanders OBE● managing director ofLighthouseGEB, the employeebenefits division of LighthouseGroup plc● chairman of the financial servicescommittee of the InsuranceInstitute of London and a councilmember and vice presidentof the Institute● a trustee of the English NationalOpera benevolent fundformerly● deputy chairman and head ofemployee benefits, Helm GodfreyPartners Ltd● joint chairman of the FSA’sSmaller Businesses PractitionerPanel● deputy chairman of theAssociation of IndependentFinancial Advisers● a member of the FinancialServices Practitioner Panel● a director of the PersonalInvestment Authority (PIA)Ombudsman Bureau● a PIA board memberBaroness Maeve Sherlock OBE● a member of the House of Lords● currently doing research for adoctorate at Durham University● chair-designate, Chapel St(charitable social enterprises)formerly● a commissioner at the Equalityand Human Rights Commission(EHRC)● a non-executive director ofthe Child Maintenance andEnforcement Commission● chief executive of theRefugee Council● chief executive of the charityOne Parent Families● a member of the Council ofEconomic Advisers in the Treasury● chair of the NationalStudent ForumPat Stafford● adviser to the Young EnterpriseCompany Programme● mentor, New Leafformerly● a non-executive director of HMRC● regional board member ofthe Prince’s Trust● governor of the Universityof Bedfordshire● group marketing director at BUPA● managing director of corporatepositioning services and headof brands management forBritish AirwaysAnnual Review 2010 | 2011

146Financial Ombudsman Serviceour board and senior peopleour executive teamour senior teamNatalie Ceeney CBEchief ombudsmanand chief executiveTony Boormanprincipal ombudsmanand decisions directorJulia Cavanaghdirector of financeand performanceDavid Cresswelldirector of communicationsand customer insightSimon Rouseoperations directorDavid Thomasprincipal ombudsmanand corporate directorCaroline Waymanprincipal ombudsmanand legal directorJacquie Wiggettdirector of humanresources (HR) andorganisational developmentBarbara Cheneycompany secretaryGarry Wilkinsonhead of casework operationsheads of casework:Simon CoePaul FlemingNathan HornerPatrick HurleyPeter ParrySteve ThomasIain Algiehead of operational designTracy Campbellhead of operations supportMark Geechief technology officerPaul Kendallhead of our customercontact divisionGemma Richardsonhead of customer experienceand qualityGraham Stride-Noblehead of decisions operationsEmma Parkerhead of media and researchCaroline Wellshead of outreach & external liaisonSally Younghead of publishing, online & designHelen Boothhead of procurementMike Harrishead of planning and analysisChris Smithfinancial controllerChris Stanleyhead of management accountsSteve Ramsayhead of HR operationsYvette Bannisterdeputy general counselPaul Bentallgeneral counselAnnette Lovellhead of policy and public affairsJ acqueline Reeshead of knowledge andinformation managementas at 31 March 2011Annual Review 2010 | 2011

Financial Ombudsman Serviceour board and senior people147our panel of ombudsmenNatalie Ceeney CBEchief ombudsmanand chief executiveTony Boormanprincipal ombudsmanand decisions directorDavid Thomasprincipal ombudsmanand corporate directorCaroline Waymanprincipal ombudsmanand legal directorJane Hingstonlead ombudsman forbanking, credit and mortgagesCaroline Mitchelllead ombudsman forinvestment and insuranceombudsmen:David AshleyGreg BarhamAudrey BaxterDavid BirdMike BoyallJune BrownJuliana CampbellValerie CharbitMelissa CollettRebecca ConnelleyStephen CooperPaul DanielKim DavenportElizabeth DawesReidy FlynnGeoffrey FuterDawn GriffithsSean HamiltonJames HarrisJarrod HastingsDoug HillAdrian HudsonMichael IngramDavid LawsonSimon LeachRuth LewisSteve LilleyAnnette LovellDoug MansellHarriet McCarthyAmanda MaycockPhil MillerDavid MillingtonJanet MillingtonRoy MilneClare MortimerRay NeighbourClaire O’ConnorJan O’LearyMichelle PetersNigel PopeSimon RawlePhilip RobertsFiona RobinsonMalcolm RogersKen RoseMark SceenyNicole ShinnickRobert ShortLesley SteadCaroline StirlingSuzannah StuartJohn SwainCharlie SweeneyRichard ThompsonChris TilsonLennox TowersRaj VaradarajanClaire WellsRichard WestKaren WhartonLindsey WoloskiClare WoollersonSue WrigleyRoger Yeomansthere are more details about ourombudsmen on our websiteAnnual Review 2010 | 2011

148Financial Ombudsman Servicewhat matters index to usAaccessibility 21, 23, 71, 76, 89, 90,102, 107, 127, 130, 131, 132, 142adjudicators 20, 22, 25, 26, 62,63, 70alternative formats 23, 91, 92Alzheimer’s Society 70, 90annuities 37, 55, 59ash-related travel-insurance cases14, 45Association of British Insurers (ABI)42awareness (of our service) 71, 76,81, 89, 90, 94, 97, 100, 101, 102,128, 131, 134Bbanks 7, 13, 40, 49, 54, 62, 116,117, 118board members (of the ombudsmanservice) 10, 70, 71, 73, 89, 127,144, 145British Bankers Association (BBA)7, 8, 13, 40, 62, 69, 73, 90, 108,135, 142budget (of the ombudsman service)8, 73, 130, 132buildings insurance 33, 37, 39, 43,66, 133, 134building societies 49, 116, 117, 118business banking 28business protection insurance28, 36, 39Ccaravan insurance 36case fees 68, 73, 120, 121cash machines 37, 47, 137catalogue shopping 36, 46, 49Ceeney, Natalie (chief ombudsman)9, 12, 146, 147chairman, Sir Christopher Kelly6, 123, 144cheque clearing 37Citizens Advice 21, 27, 82, 105,136, 137claims-management companies16, 21, 27, 29, 30, 41, 47, 93,97, 128commercial insurance 28, 36, 39complaints data 10, 14, 66, 118,120, 131, 136complaints-handling rules 20, 25,26, 41, 83, 126, 135complaints prevention 45, 122consumer credit 26, 33, 36, 46,49, 63, 64, 67, 87, 116, 118, 119,123, 126consumer helpline 12, 18, 20, 22,26, 77, 79, 82, 93, 96, 102contents insurance 33, 38, 39, 43,66, 133credit broking 36, 46, 49, 50credit cards 29, 33, 36, 46, 48, 67,69, 79, 96, 138credit reference 36, 66credit unions 120, 126critical illness insurance 38, 45current accounts 26, 29, 33, 36,46, 47, 67, 69, 78, 79, 86, 87,96, 98customer experience 71, 72customer research 22, 30, 71, 76,79, 97, 99, 101, 102, 103, 105,107, 112DData Protection Act 137debt adjusting 36debt collecting 36, 49debt counselling 36debt management 49demographics (of consumers)30, 100, 103Department for Business,Innovation and Skills (BIS) 127derivatives 38, 55different needs 23, 70, 91, 92direct debit 36, 46disability 21, 45, 70, 90, 91, 92,107, 134, 142disputed transactions 47, 48,135, 136distress and inconvenience(compensation) 66, 130diversity 20, 21, 23, 64, 71, 76,89, 90, 95, 99Eelectronic payment 37equality 76, 89, 90, 95ethnic minority groups 30, 64, 84,92, 93, 94, 99European Commission 127extended warranty insurance38, 39, 132external liaison (at the ombudsmanservice) 122, 128, 151executive team (at the ombudsmanservice) 70, 71, 89, 146Ffaith and religion 64, 95“faster payments service” 54final response letter 25, 26financial difficulty and hardship36, 45, 46, 48, 52, 69, 133, 136Financial Services Authority (FSA)7, 9, 10, 13, 20, 25, 26, 40,41, 59, 73, 119, 126, 127,130, 135, 137FIN-NET 127focus groups 71, 103freedom of information 127friendly societies 117, 120“frivolous and vexatious”(complaints) 67, 68FSAVCs 37FSCS (Financial ServicesCompensation Scheme) 60Ggender 79, 110guaranteed asset protection(“gap” insurance) 36guaranteed-income bonds 37, 55Annual Review 2010 | 2011

Financial Ombudsman Serviceindex149Hhealth insurance 26, 39, 45,66, 135hearings 65High Court 7, 40hire purchase 36, 46, 49, 50HM Treasury 10, 126, 127holiday clubs 48, 50home credit 36household insurance 43Iidentity theft 126impartiality 21, 106income and expenditure 73, 74income draw-down 37, 59income protection insurance 38, 45independent assessor 72independent financial advisers(IFAs) 116, 117, 118industry panel 107, 123, 128insurance intermediaries 116, 117internet 21, 52, 54, 82, 94, 97,99, 111, 112investment bonds 56, 67ISAs (individual savings accounts)37, 53, 55Jjudicial review 7, 8, 13, 40, 69, 73,90, 108, 135KKelly, Sir Christopher (chairman)6, 123, 144knowledge management (at theombudsman service) 70, 71Llanguages other than English21, 23, 24legal expenses insurance38, 39, 135levy (the ombudsman service’sfunding) 73, 121loans 33, 36, 46, 52, 67, 69, 87,96, 98Lord Hunt of Wirral 127, 130, 142Mmass claims 123, 126maximum compensation59, 126, 135medical insurance 26, 39, 45micro-enterprises 28Ministry of Justice 29, 127mis-selling 56money transfer 37, 54mortgages 29, 33, 36, 46, 51, 6364, 67, 117, 126, 141mortgage endowments 26, 29, 33,37, 55, 58, 67, 86mortgage intermediaries 116, 117motor insurance 26, 33, 36, 39,42, 66, 87, 96, 98, 136NNational Audit Office (NAO) 127newspapers 82, 84“non-disclosure” 44, 45OOffice of Fair Trading (OFT)119, 126, 130older consumers 47, 64, 76, 78,98, 99, 111, 139ombudsman decisions8, 15, 43, 56, 57, 62, 63, 64, 69,73, 77, 78, 79, 93, 98, 127ombudsman panel62, 130, 139, 147ombudsman news19, 122, 128, 131, 132, 133, 135,137, 138, 139, 141, 151operating costs 8, 16, 74outcome of complaints 30, 65, 66,67, 79, 85, 95, 109, 118, 121outreach (by the ombudsmanservice) 29, 30, 76, 90, 98, 102,128, 141overdrafts 46, 69, 86Ppayment protection insurance (PPI)6, 7, 8, 9, 13, 14, 19, 26, 27, 29,32, 33, 36, 39, 40, 41, 62, 63, 6466, 69, 73, 76, 77, 79, 81, 86, 87,90, 93, 95, 96, 98, 108, 116, 117,118, 135, 136, 137, 138, 140pensions 29, 33, 37, 55, 59, 63,64, 67, 78, 87, 96, 98, 117, 139PEPs (personal equity plans) 37personal accident insurance 38pet insurance 36, 39, 130point-of-sale loans 36, 50portfolio management33, 38, 55, 60, 67powers of attorney 47, 133private medical insurance 38, 45Qquality 69, 70, 71Rratings (by customers)108, 109, 121, 128regulatory review 9, 127repossession 51reserves 9“reviewable” policies 57risk 57, 58roadside assistance 36, 39Annual Review 2010 | 2011

150Financial Ombudsman ServiceindexSsafe custody (banking) 37sale and rent-back 126Samaritans 70, 90savings accounts33, 36, 46, 53, 67, 87savings endowments33, 55, 57, 58, 67section 75 (consumer credit)48, 50, 139SERPs 37, 55Shaw Trust 107SIPPs (self-invested personalpensions) 37, 55, 59smaller businesses21, 28, 29, 123, 128, 130, 133,135, 136, 140social media 82, 97Society of Lloyd’s 117socio-economic groups20, 30, 83, 84, 86, 87, 101, 103spread-betting 38, 55, 133SSASs (small self-administeredschemes) 37, 55stakeholder engagement16, 126, 128stockbroking33, 38, 55, 60, 67, 132store cards 36“structured” products 37, 55Ttechnical advice desk122, 128, 151time limits 22, 58timeliness (of the ombudsmanservice’s casehandling)7, 15, 68, 69, 108trade associations 29, 41, 57, 105,122, 123, 133Trading Standards 21, 27, 82, 105training and development (at theombudsman service) 16, 70travel insurance 14, 26, 33, 38, 39,44, 66, 134, 138, 142trust 105Uunit cost (at the ombudsmanservice) 8, 73unit trusts 37, 55unit-linked bonds 33, 37, 55uphold rates of complaints66, 67, 89, 95, 120Vvehicle valuation 42vulnerable consumers20, 90, 101, 130Wwebsite (of the ombudsman service)10, 19, 40, 66, 71, 94, 105, 110,111, 112, 113, 118, 122, 127, 128whole-of-life insurance33, 37, 55, 57, 67“with-profits” bonds 33, 37, 55, 141Yyoung consumers20, 64, 77, 78, 82, 84, 96, 97,101, 103, 132, 134, 139, 142Annual Review 2010 | 2011

Financial Ombudsman Serviceservices for businesses and consumer-advice agencies151how we can helpcontact our technical advice desk for:■ an informal steer on how the ombudsman might view particular complaints■help finding the information you need about the ombudsman service■information about how the ombudsman service works.020 7964 1400technical.advice@financial-ombudsman.org.ukour external liaison team can:■ provide training for people working with financial complaints■organise and speak at seminars, workshops and conferences■ take part in events and exhibitions .020 7964 1400liaison.team@financial-ombudsman.org.ukour website www.financial-ombudsman.org.uk gives you online access to:■ news and frequently-asked questions (FAQs)■help for consumers and technical guidance for businesses■publications, briefing notes and ombudsman news– our regular newsletter with case studies and commentary.Annual Review 2010 | 2011

152Financial Ombudsman Servicewhat matters to usThe Financial Ombudsman Service was set up by law as an independent public body.Our job is to resolve individual disputes between consumers and financial servicesbusinesses – fairly, reasonably, quickly and informally.“… settling disputes,without taking sides”We believe we can best do what we are here for by knowing what matters to us – and standingby our values in all areas of our work. What matters to us is that:we do the right thingwe treat our customers welland respect their needswe do what we say we’ll dowe’re inquisitive and buildeveryone’s knowledge“… sharing what we see,to help prevent future problems”We want to provide our customers – businesses and consumers alike – with an excellent service.And we are constantly developing and improving what we do and how we do it. To help us in this,we are committed to:delivering a trusted, fair andeasy-to-use service – for everyoneputting knowledge and expertiseat the heart of everything we dorunning a “lean” andefficient organisationsharing our experience and insight,to help prevent future problemsbeing flexible,reliable and effectiveAnnual Review 2010 | 2011

Financial Ombudsman Service© Financial Ombudsman Service Limited, May 2011Produced by the communications team at the Financial Ombudsman Service (646/19.05.11).Photography by Margie Hetherington at the Financial Ombudsman Service.This annual review is printed on Claro Silk, a paper comprising fibres sourced from well-managedsustainable forests. The paper’s manufacturing process is chlorine-free.Annual Review 2010 | 2011

how to contact us■ write to usFinancial Ombudsman ServiceSouth Quay Plaza183 Marsh WallLondon E14 9SR■ phone us0300 123 9 1230800 023 4567switchboard 020 7964 1000■ email uscomplaint.info@financial-ombudsman.org.uk■ look at our websitewww.financial-ombudsman.org.ukWe can help if you need information in a different format(eg Braille or large print) or in a different language. Just let us know.Financial year 2008 | 09