The Financial Ombudsman Service dealt with a record 206,121 formal disputes between 2010 and 2011, a 26 per cent leap on the previous financial year.
More than half the new cases (51 per cent) related to the sale of Payment Protection Insurance (PPI), which made up the highest number of complaints ever received in a year about a single financial product – 104,597 in total.
Despite the rise the Ombudsman settled fewer disputes during the year, resolving 164,899 cases during 2010/11 down from 166,321 the previous year, which it attributed to slower progress on large numbers of PPI complaints.
A statement in the FOS annual review said: “PPI complaint resolutions were hampered by delays, uncertainty and less co-operation from some financial businesses, as a result of the legal challenge on PPI-related matters brought during the year by the British Bankers Association on behalf of a number of high-street banks.”
The FOS also revealed that six per cent of all complaints received centered around consumer credit, where 50 per cent of disputes were upheld in favour of consumers. Meanwhile total complaints about banking fell by nine per cent compared to the previous year.
During the period the Ombudsman handled around 4,000 front-line enquiries and complaints from consumers every working day, with one in five enquiries becoming a formal dispute requiring adjudicator and ombudsman involvement.
Natalie Ceeney, chief executive and chief ombudsman at the FOS said despite the past year being one of the Ombudsmans’ busiest there were improvements in the way businesses handled complaints.