top of page
  • Robert Bell

Financial Ombudsman's Annual Complaints Data 2020/2021

This week we’ll take a look at the Financial Ombudsman’s Annual Complaints data for 2020/2021, published at the end of May 2021. The Ombudsman offers a free service for consumers who are unsatisfied with the outcome of a complaint made to a financial service provider – the Ombudsman can consider the case and decide whether the consumer was unfairly treated, and make use of legal powers to put things right.

The recent review confirmed that the number of complaints had increased over the previous period, and the analysis suggested that, unsurprisingly, the pandemic had played a part, particularly as many of the complaints were around poor communication and a failure to manage customers’ expectations.

Financial Ombudsman's Annual Complaints Data




Some of the case studies presented by the Ombudsman brought the very personal nature of some of the complaints to the fore, with weddings and health treatments cancelled due to the pandemic, the effect of local banking restrictions or online account restrictions due to the pandemic on personal banking, an increase in scams and issues with firms failing to properly support those who are in financial difficulties.

The proportion of the total number complaints linked to PPI dropped significantly on the previous year, meaning that some other types of complaints saw very significant increases on 2019/20. Banking and credit, for example saw a 66% increase, insurance saw a 36% increase, and investments and pensions saw a 91% increase (although the total is much lower than any of the other types at just over 20,000). Complaints relating to claims management companies decreased.

So what is behind the rise in banking and credit and insurance complaints?

The data reflects that much of the increase is linked to unaffordable lending and customers experiencing financial difficulties, which highlights the importance of ensuring that both creditworthiness assessments and post-agreement customer support practices are robust enough for the post-Covid world.

The most complained-about product in banking and credit was current accounts with 23,678 new complaints. The Ombudsman suggests that what would have been key to preventing many of these complaints is the taking into account of the customer’s individual circumstances – asking the customer directly for more information was suggested as a minor adjustment that could have been made to find a solution that works for both parties.

Customers experiencing problems with reclaiming money under Section 75 of the Consumer Credit Act 1974 was behind a 72% increase in complaints about cancellations of holidays and events – with delays in processing times behind a substantial number of them.

Unaffordable lending was the most complained about issue, with over 57,000 new complaints about the issue. At the crux of this matter, the Ombudsman suggests that awareness of signs of potential financial difficulties are being missed. This is particularly the case in the high-cost lending sector, where many customers will begin their lifecycle with the service with some existing financial difficulties and which means there is a risk that they will be provided with credit they cannot afford.

The Ombudsman decided a significant majority of borrowing cases in the customer’s favour. They suggest that firms keep focus on established rules and guidance on lending and handling complaints – noting that lending decisions can even impact on a firm’s own financial stability.

The FOS does not go into more detail on that point, but it is clear that appropriate creditworthiness assessments and early awareness of signs of difficulty and appropriate support are the underlying issues. Section 5.2 of the FCA’s CONC sourcebook covers the creditworthiness assessment, which requires that a ‘reasonable assessment of the creditworthiness of a customer’ must be taken before entering into or increasing a credit agreement.

The rules within CONC are not specific, with the effect being that firms must decide the level of information that is appropriate for them, given the type of business and the type and amount of credit. The rules states only that the creditworthiness assessment should be based on ‘sufficient information’.

Given the increase in complaints, a new evaluation on whether these assessments are getting it right for customers might mean that some of the parameters for lending within firms may need to be adjusted, especially given the increasing number of customers who are likely to be affected by the impact of the pandemic.

Particularly where customers are in a position where they cannot afford to keep up their repayments, it is in all parties’ interests to help customers to repay what they can, and when they can, in line with the Tailored Support Guidance. A key element of this is communicating clearly and at appropriate intervals with the customer to keep them updated, find out more about their specific circumstances and work with the customer to find an option that works well for them, meaning that frontline staff must be given the ability to contact the customer at the appropriate time.

The complaints data strongly suggests that this strategy would also help avoid many of the complaints that have been made this year. This makes it all the more important that frontline staff are clear on signs of struggle, and early indicators of financial difficulty as well as having the confidence they need to be able to make decisions to act in customer’s best interests, whether that is a phone call for additional information, or a discussion about what they might need to get back on track.

Training staff gives them the confidence to speak to and support customers in financial difficulties. Our dedicated course takes learners through techniques that have been tried and tested, covers questioning skills, empathy and active listening, what to say, when to say it, and how to support customers. It also covers recording of the customer’s personal information in line with the General Data Protection Regulation and the Data Protection Act 2018.

This online course, priced at just £15, is accessible at the delegate’s convenience, and provides a certificate upon successful completion, allowing firms to track and record each user’s progress. For large groups, we can offer a simplified enrolment service and pricing, simply email


Conduct Rules Training.png
Corporate Compliance Training

Our online compliance training platform is specially designed for firms looking to book a number of learners on our courses

Stacked Books
Compliance Resources

Our online compliance resources provide all the information you need to know in relation to compliance hot topics.

bottom of page