Navigating the Rising Tide of Financial Complaints: Insights from Q1 2023-24
Unpacking the Complaints Landscape
Understanding customer feedback is crucial in the financial world. The Q1 2023-24 data from the Financial Ombudsman paints a vivid picture:
Rising Complaints Volume: This quarter, there were 73,429 new enquiries and 43,953 new complaints related to financial products and services. This represents a substantial increase compared to the same period last year when there were 35,029 complaints recorded.
Challenges in Insurance: Complaints regarding buildings, car, and motorcycle insurance have surged to a five-year high. Delays in processing and paying insurance claims have contributed significantly to this increase.
Current Account Concerns: Current accounts took the lead as the most complained-about product this quarter, with complaints rising by a third compared to the same period last year. The primary driver behind this increase is fraud and scam complaints, which also saw a one-third surge.
Travel Insurance Troubles: Travel insurance complaints have doubled in just one year, reaching their highest Q1 figure in over a decade. This escalation underscores the challenges in the travel insurance sector.
Resolution Rates: Interestingly, there has been a slight increase in the percentage of cases resolved in favor of consumers year on year. On average, 37% of cases were upheld, up from 34% in the same period last year.
The Top Five Most Complained-About Products
- Current Accounts
- Credit Cards
- Car or Motorcycle Insurance
- Hire Purchase (Motor)
- Buildings Insurance
[Download the data: The top five most complained-about products in Q1 2023/24 Here]
The data from this quarter reveals that consumers continue to seek assistance for complaints about everyday financial products and services that are essential to their lives. While these products are consistent with previous quarterly data, buildings insurance made a notable appearance in the top five for the first time since last year’s first quarter.
Spotlight on Claim Delay Complaints
Car or Motorcycle Insurance
Complaints related to car and motorcycle insurance have surged by over 50% year on year. In Q1 2023-24, the Financial Ombudsman received 3,869 complaints, compared to 2,524 in the same period the previous year. The uphold rate has also increased, rising from 29% to 36% during this period.
These complaints encompass various issues, including disputes over claim values, declined claims, and administrative and customer service problems. The most significant increase has been in complaints about claim delays, which shot up by 90% compared to the previous year.
Several factors contribute to this increase. Insurers delaying claim payouts, challenges in sourcing materials, and disruptions in repair timelines have all played their part.
[Download the data: Car or motorcycle insurance related complaints about claim delay received in Q1 for the last five years Here]
Buildings insurance emerges as the fifth most complained-about product this quarter, constituting around 4% of the total complaints received. In the first three months of 2023, the Financial Ombudsman received 1,776 complaints. Similar to car and motorcycle insurance, complaints about claim delays have risen annually, reaching 503 complaints in Q1 2023-24, up from 351 in the same period last year.
[Download the data: Buildings insurance related complaints about claim delay received in Q1 for the last five years Here]
Other Noteworthy Trends
With 7,224 complaints received in Q1 2023-24, current accounts took the lead as the most complained-about product. Complaints increased by a third compared to the previous year, primarily driven by fraud and scam complaints, which also rose by a third during the same period.
Complaints About Fraud and Scams
Complaints related to fraud and scams across all financial products have surged by almost 39%, totaling 6,094 complaints, up from 4,392 in the same quarter the previous year.
Credit cards consistently rank as the second most complained-about product, with 4,189 complaints this quarter compared to 2,730 cases five years ago (Q1 2019-20). The top three issues in credit card complaints include complaints about unaffordable or irresponsible lending, administration and customer service problems, and complaints about Section 75.
[Download the data: The top five issues in complaints about credit cards received in Q1 2023/24 Here]
Hire Purchase (Motor)
There were 3,678 complaints about hire purchase (motor) in Q1 2023-24. Over a third of these complaints related to charges, fees, and commission, primarily due to complaints about undisclosed commission.
Map Room Consulting: Your Partner in Complaint Handling
Amidst the rising tide of financial complaints, firms require strategic support to manage and resolve customer issues efficiently. Map Room Consulting stands ready to assist financial institutions facing challenges in deploying skilled complaint handlers during peak periods.
How Map Room Consulting Can Help:
Experienced Talent: We provide access to a pool of experienced complaint handlers who understand the intricacies of the financial industry. Our experts are well-versed in regulatory requirements and possess the skills needed to navigate complex complaints.
Scalability: During peak complaint periods or sudden spikes, firms may struggle to allocate sufficient resources. Map Room Consulting offers a flexible approach, allowing firms to scale their complaint-handling teams up or down as needed.
Training and Development: We prioritise continuous learning and development. Our consultants receive up-to-date training to ensure they are well-prepared to handle evolving complaint scenarios.
Regulatory Compliance: Compliance is at the core of our services. We ensure that all complaint-handling activities align with regulatory requirements, reducing the risk of non-compliance.
Efficiency and Resolution: Our goal is to help firms resolve complaints efficiently and to the satisfaction of customers. This not only enhances customer trust but also minimises reputational risk.
Custom Solutions: We work closely with financial firms to tailor our services to their unique needs and challenges. Whether it’s improving internal processes or providing additional complaint-handling capacity, we craft solutions that align with your goals.
In a landscape where customer satisfaction and regulatory compliance are paramount, partnering with Map Room Consulting can be a game-changer for financial firms. Our dedicated complaint-handling specialists are equipped to tackle the growing volume and diversity of complaints in today’s financial industry.