In a speech to the Consumer Action Network, Walter Merricks, chief ombudsman at the FOS, warned that company reputations were at risk across the consumer sector due to the poor standards of complaints handling by the major financial services groups.
He said: “The larger businesses become – as a result of mergers and acquisitions – the less it sometimes seems that they are capable of coping efficiently and fairly with consumer complaints. The race for size has left back offices struggling to integrate old computer systems inherited from previous businesses, and unconnected complaints handling units operating inconsistently with little sense of direction or leadership.”
Merricks explained that the poor complaints handling practices were in addition to the two million consumers who had already complained about endowment mortgages, and said consumers were no longer afraid to voice their dissent.
He added: “The industry has paid out nearly £3 billion in compensation for mis-sold mortgage endowment policies. Two million consumers have learned not to be afraid of
complaining.”
Rachel Loynes, adviser at Carterbar Ltd, admitted that an increase in consumer knowledge had helped borrowers redress grievances. “Consumers have access to more information, which has made a big difference. Lenders must ensure they have proper complaints handling procedures in place.”
