Financial Ombudsman Service – disputes on the rise

FOS: Disputes on the rise

FOS is the Financial Ombudsman Service which deals with disputes made to it after an Insurance Company has declined or not adequately settled a claim.

It is a concern that Insurance Companies have yet to appropriately deal with their claims approach or service. Recent statistics from the Financial Ombudsman Service (FOS) show total disputes across the financial services sector referred to the ombudsman were up 29% for the first quarter of 2012, compared with the corresponding period in 2011.

FOS cases have risen steadily over the past year, only reducing slightly in the last part of 2011.

In 2011 the number of disputes increased 13% from the first quarter to the second quarter. Then 12% from the second quarter to the third quarter, before reducing by 12% in the final quarter of the year.

However already the first quarter of 2012 disputes referred to FOS were up 16% on the final quarter of 2011, with 9590 new disputes lodged.

Out of those, General insurance accounted for 2814 of the disputes received by FOS. Credit disputes account for 49% with General Insurance making up 29%.

In the January-March 2012 quarter, FOS closed 8734 disputes – 5% more than in the previous quarter and 20% more than for the first quarter of last year.

Of the disputes closed, 68% were resolved through an agreement between the financial services provider and the consumer, with only 8% formally decided by FOS.

Of the 8% of disputes resolved by FOS, 59% were closed in favour of the financial services provider, while 41% were resolved in favour of the consumer.  For many of us, those resolved in favour of the policy holder should have been avoided.