The Financial Ombudsman Service (FOS) handled over a million front-line enquiries and complaints from consumers in the 2010/11 financial year.
According to the watchdog’s annual report, around one in five enquiries required the involvement of the ombudsman, resulting in a record 206,121 new cases, with the figure up 26% on the previous year.
Over 50% of new cases (104,597) were about the sale of payment protection insurance, the highest number ever received in a year about a single financial product.
In addition, the report notes that consumers continue to complain about the make-up and description of investment funds.
In particular, that the description of some funds as “cautious” failed to reflect the real risks involved and that the use of the word “cash” as a description of a fund wrongly implied a safe deposit.
However, chief ombudsman, Natalie Ceeney, confirmed that the Service has also seen “encouraging signs of improvements” in the way that some businesses are handling complaints.
In addition, the number of disputes about some financial products has begun to fall.
Notably, the number of investment complaints dropped by 30% and banking complaints fell by 9%.
Other key statistics are as follows:
The ombudsman’s involvement resulted in compensation for consumers in 51% of cases.
Complaints about consumer credit, travel insurance and motor insurance increased, while complaints about health insurance, current accounts and home contents insurance fell.
FOS research also indicates that 78% of adults are aware of its existence, with awareness of the ombudsman highest in Wales and lowest in Northern Ireland.