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Financial Ombudsman attacks banks on payment protection insurance

Financial Ombudsman Service
Tony Boorman of the Financial Ombudsman delivered a stinging attack on banks at a British Bankers’ Association (BBA) complaints-handling seminar. "At the ombudsman service we have received record numbers of complaints from customers dissatisfied with the service their bank has provided. The payment protection insurance complaints saga has seen the banks in court attempting unsuccessfully to judicially review the decisions of the ombudsman service and the regulator about how those complaints should be handled. This is a process that has now led to over 200,000 complaints to the ombudsman service alone and the likely need to compensate many more customers with justified complaints about the way PPI was sold. It sometime seems as if banks are addicted to regular mis-selling scandals. The first lesson is clearly that early and decisive action is in the interests of all parties. Too often we have seen problems that are at first ignored, then denied, then minimised, and only eventually tackled when it is too late. Tens of thousands of consumers are then drawn into protracted complaints, with all the administrative costs and complexity that this involves. It is hardly surprising that bewildered and angry consumers tell us they are confused about what went wrong and what they need to do to, to get things put right. Banks need to be more open to accepting critical observations about past practices and more ready to propose ways in which those problems can be resolved fairly, efficiently and promptly. In cases of mass detriment caused to consumers, consideration needs to be given both to those who do complain and those who do not. Simply leaving the ombudsman to handle tens of thousands of individual cases cannot be the right answer for the customer, the industry or the ombudsman service.”

 

He went on, “One valuable source of information is what your own customers are telling you through complaints. Good complaints handling is not just about resolving the individual case, it is also about using the information you obtain to help avoid complaints in future. Thinking about and tackling root causes of complaints is a core part of any quality and customer service improvement programme. Most of our decisions are, of course, very individual, based on the particular set of circumstances of an individual case. But inevitably we sometimes address areas that you will know touch on the circumstances of other customers. At a minimum, it seems to me that in those cases our decision should inform how you handle any subsequent complaints. And, of course, you may need to consider more active steps if you are to treat all your customers fairly.”

 

And finally, “We have now been publishing complaints data for two years, showing the volume of cases and the outcome of complaints in relation to named individual businesses. We will in future separate out PPI into its own category in the data we publish. This will apply to the data we will be publishing in September 2011 in relation to complaints for the first half of 2011.This will allow all to see more clearly the impact that PPI is having on customer complaints. It will give a more accurate picture of the position of each bank, as they tackle the expected continuing large numbers of PPI complaints.”

Income protection insurance news: 28 June 2011

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