Covid Crisis Bites as Complaints to the Ombudsman Soar

The Financial Ombudsman Service (FOS) says that the impact of Covid-19 on personal finances has led to thousands of extra claims; more than 3,500 complaints related to coronavirus have been made from people unhappy with a financial company.

Unsurprisingly, a large proportion – 23% – came from people whose insurers did not pay out where a holiday or event was cancelled.

But other issues show just how pervasive the financial effect has been with people falling into loan arrears, being unable to afford monthly insurance fees, not being able to get a payment deferral or having problems setting it up.

FOS published data on total complaints for the quarter April to June, showing 57,509 new cases; it upheld 32% of the ones it has resolved so far.
 

‘Some financial businesses must do more to ensure they are treating customers fairly’

In announcing its figures, Caroline Wayman, chief executive of the FOS said: ‘Covid-19 has had a huge impact on our lives, including finances. ‘Since measures to control the virus were put in place, we’ve been hearing from people who aren’t happy with how their financial provider has treated them. Some financial businesses must do more to ensure they are treating customers fairly.’

FOS believes insurance-related complaints will abate in the coming months, but that there will be more cases of people in financial difficulty.

Typically, complaints revealed people struggling to get refunds from hotels, airlines and holiday operators, with others were stranded abroad when operators collapsed; others related to cancelled weddings.

Lockdown left insurers unable to process motor and property claims, or to complete property surveys; complaints were made too about shut bank branches where customers are not online.

Covid also led to delays to pension transfers and disruptions to providers’ own complaints procedures; because the ombudsman gets involved only after the provider’s own complaints procedure has completed, FOS believes coronavirus-related cases will continue in the months ahead.

There was also a spike in complaints about guarantee loans, up 177% to 1,017, and doorstep loans, higher by 77% at 1,166, with uphold rates running at 85% and 86% respectively.