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Financial Ombudsman reveals ‘record’ year for disputes

PPI, packaged accounts and powers of attorney complaints on the increase

28 May 2014

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Consumer-related financial disputes reached a record high in the year to March 2014 as the Financial Ombudsman helped to settle 518,778 complaints, more than double last year's figure, according to a report by the appeals service.

Chief ombudsman Tony Boorman said: "It's been an unprecedented 12 months for the ombudsman by anyone's standards. Complaints continued at record levels - and we resolved over half a million cases during the year."

Three-quarters of complaints received related to payment protection insurance (PPI). The number of such complaints rose 6 per cent to 399,939, but the ombudsman said the number of cases coming in per week had dropped to 6,000. This is compared with 12,000 recorded per week a few months ago.

Packaged bank accounts, sometimes called 'paid-for' bank accounts, saw the largest rise in complaints (from 1,629 to 5,667). These usually have a monthly or annual fee and include a range of additional benefits such as insurance, car breakdown cover and preferential rates on overdraft facilities and loans.

The ombudsman has also warned banks to offer more training to its staff as it reveals it is receiving up to 35 complaints a month concerning issues on powers of attorney.

Sofia Tayton, partner at Lodders Solicitors, told Private Client Adviser: "It's been a year since A framework for authorising people wanting to operate a bank account for someone else: guidance for banks and building societies was issued.

"At the time, I noted that training for staff was fundamental for the guidance to have an impact. Sadly, it has not been an overwhelming success.

"In the past couple of months, I have been involved in two matters that indicate just how much of a problem this can be."

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Risk & Compliance