FCA: Financial Services Complaints Rise Significantly

New reporting methods boost numbers, but increase is “still significant.”

The UK’s Financial Conduct Authority (FCA) reported that 3.32 million complaints were made to financial firms in the first half of 2017, up from 3.04 million in the second half of 2016. The total redress paid to consumers was £1.99 billion ($2.64 billion) in the first half of 2017, compared to £1.97 billion during the same period in 2016. 

According to the FCA, 97% of the complaints were directed at 226 firms, which received 500 or more complaints each. During the first half of 2016, 2.06 million complaints were reported by 2,796 firms, compared with 3.32 million complaints being reported by 3,160 firms during the first half of 2017.

The FCA said the increase from the previous year was significantly influenced by the changes the organization made regarding the reporting of complaints. Since June 2016, firms have been required to report data in a new way that has increased the number of complaints reported.   

“We now require firms to report all complaints which gives us a fuller picture of where the industry might not be meeting customer needs,” said Christopher Woolard, the FCA’s executive director of strategy and competition, in a statement. “But even allowing for the change in reporting rules, and some progress made, the numbers are still significant.”

Payment protection insurance (PPI) not only continues to be the most-complained-about product, garnering one-third of all complaints in the first half of 2017, but it also saw the sharpest rise in complaints among products. The total number of PPI complaints increased by 24% to 1.11 million in the first half of 2017, from 899,000 during the second half of 2016.

“Our analysis suggests this is a real increase since the first half of 2016, when 934,965 were received,” said the FCA in its report. “Because few PPI complaints are resolved by the end of the next business day, the volume of PPI complaints is unlikely to be impacted by the changes in the new return.”

PPI is insurance that helps cover monthly repayments on mortgages, loans, credit cards, store cards, or catalogue payments if the holder of the insurance is unable to work due to illness, accident, death, or unemployment.

After PPIs, the next most-complained-about products were current accounts, with more than 518,000 complaints, and credit cards, with nearly 310,000 complaints. The FCA said although complaints about these products have increased since the first half of 2016, the change is not a meaningful comparison, as the new reporting changes are likely to have affected these products.

Some 43% of all complaints made during the first half of 2017 were related to “advising, selling and arranging,” which is down from 59% in the first half of 2016, while “general administration and customer service” accounted for 38% of all complaints, up from 27% of all complaints in the first half of 2016.

 

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