FSO is much more successful than headline figure of "only 10% upheld" suggests

Discussion in 'The Financial Services Ombudsman' started by twofor1, Jul 3, 2014.

  1. twofor1

    twofor1 Frequent Poster

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    Last edited by a moderator: Mar 3, 2015
    I have been involved in a case recently where the provider offered to settle in full when they saw the questions put to them by the FSO. The offer was accepted, the complainant got 100% satisfaction directly as a result of the FSO’s intervention, but as there was no adjudication, this case will be classed as ‘’Closed Prior To Investigation’’ but settled.

    This got me looking at the FSO’s last annual report again, yes only 302 cases (10%) adjudicated on in 2012 were fully upheld.

    But 1,282 complaints like ours were closed prior to investigation, but settled. I think it is reasonable to assume they were settled satisfactorily for the complainant or they would have continued on to adjudication. The fact that the FSO had accepted the complaint means the complaints procedure with the provider was exhausted and no settlement would have been achieved without the FSO’s intervention.

    If complaints closed prior to investigation, but settled are added to the adjudicated cases, you then have 4,272 cases, 2,183 were not upheld, but 302 were upheld, 505 partly upheld and 1,282 settled prior to investigation.

    Is it reasonable to say 2,089 (Nearly 49%) probably had a positive outcome as a result of making a complaint to the FSO in 2012 ?

    Pages 18/19 here:
    https://www.financialombudsman.ie/documents/FSO_AR_2012_Eng.pdf
     
    Last edited by a moderator: Mar 3, 2015
  2. Gerry Canning

    Gerry Canning Frequent Poster

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    twofor1;
    The ombudsmans brush covers a lot of issues and as you say a lot of places concede when ombudsman gets involved and that is very good.

    I had chased ppi cases for nearly 2 years and sadly the figure drops to 12% .
    I also understand but cannot confirm that lot of Bank/insurance type cases are not upheld ,that would clearly be upheld in Uk.

    If Ombudsmans involvement had 1282 settled prior to investigation then Ombudsmans time is being wasted by (chanchers). Is there any sanction for messers?
    I would wish Ombudsmans resources be free to work on the (harder) cases.
     
  3. Monksfield

    Monksfield Frequent Poster

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    I agree that the figure for cases upheld very substantially under represents the favourable outcomes which arise via the FSO,though I am still quite disillusioned by my experiences in some cases I have worked on.Yes in many of these cases the provider has essentially admitted that they were in the wrong but that does not mean the consumer got full redress.

    In the most recent case in which I was involved the claimant had such a strong case that they should have been almost certain of getting a determination in their favour (fully). However the provider offered about half of what would have represented restitution on the basis that the decisions of the FSO are so erratic that they believe they will win a few they shouldn't.

    With a good few cases against them they can afford to play the numbers game.They also have the benefit of seeing the rulings on a range of cases and their interaction with the FSO whereas the complainant only has the published cases studies to inform him.This deck is loaded in favour of the providers.And that is without the perceived pro-provider tendency which many have observed in determinations.
     
  4. MugsGame

    MugsGame Frequent Poser

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    The 'chancers' being the financial insitutions who roll over and offer a reasonable settlement once they realise the complainant is serious and involves the FSO. That's what happened to me.
     
  5. twofor1

    twofor1 Frequent Poster

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    Hi Mugs, is this the case you are referring to;

    http://www.askaboutmoney.com/showthread.php?t=180358

    If so, did you accept mediation, or did PTSB just roll over and offer to settle at the first correspondence from the FSOB which is the offer of mediation and is before the formal investigation begins.

    Admittedly you should not have had to go as far as the FSO, but when you did, you got 100% satisfaction in 11 days directly as a result of his intervention, that’s fairly impressive.
     
  6. MugsGame

    MugsGame Frequent Poser

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    Yes that's the case I'm referring to. BTW I'm agreeing with your interpretation of the figures: the Ombudsman may be more effective/successful than it appears, since many cases will be settled before a determination is made.

    AFAIK all the Ombudsman did in my case was write to PTSB and myself noting the complaint and offering mediation. I accepted the offer of mediation, but in parallel with that, PTSB contacted me offering a settlement, which I accepted.
     
  7. twofor1

    twofor1 Frequent Poster

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    Thanks for confirming.

    Yes that is the point I am trying to make, excluding some specific cases notably PPI’s, you actually have on average, a 49% chance of getting a favorable result if you take your complaint to the FSO.

    The general belief is only 10% upheld which is correct, but this percentage on its own is misleading and I am sure puts many people off taking that extra step to the FSO.

    In 2012 only 302 cases were fully upheld, but well over 4 times that amount, 1,282 were closed prior to investigation, but settled, directly as a result of the FSO’s intervention. I think that is a highly significant fact that is overlooked by many.

    I would also be fairly sure that the providers would like to keep it that way, hence, as a matter of routine, they refuse settlement in cases that they know they will probably loose.

    The providers do this because they know the majority will not take that extra step to the FSO, the few that do are then often closed prior to investigation, after being settled at that point.

    This saves the providers a fortune and avoids adjudication on the cases that the providers know they would most likely loose. It also maintains the the seemingly low percentage of cases upheld in favour of the complainant.

    In the case I was involved in, the full settlement, over €30K was offered if we confirm that we no longer wanted this complaint adjudicated on by the FSO.
     
  8. Gerry Canning

    Gerry Canning Frequent Poster

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    Twofor1.

    Glad you excluded PPI cases .
    PPI seems to be a law onto itself and I may be a bit unfair tarring FSO with my criticism of them .
    On ppi , the Statute of limitation kills most cases ( Fianna Fail have bill to sort this in Autumn),
    On ppi, the Law seems to rest on Contract Law ie suits Banks.

    On ppi 2 High Court cases are coming in Autumn .
    With a fair judgment people might get the 2.5 Billion back ?
     
  9. Brendan Burgess

    Brendan Burgess Founder

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    Hi twofor1

    Very good analysis.

    One thing which I don't understand though, is why the rate of complaints actually upheld in the UK is so much higher. Extrapolating from your analysis, Irish banks might be more clever than the British banks and just settle the cases. Or maybe there is no disadvantage for the UK banks in resisting a complaint all the way.

    The cases I have been involved in, demanded a huge amount of work and time for the complainant and their advisors. The bank would have also faced at least the same amount of work and cost. It seems to be much more informal in the UK.

    On a tracker case I was involved in recently, the lender strung it out over two years although I felt that they had no defence to the complaint. Then while we were waiting for the Ombudsman to rule, they restored the tracker, backdating it 6 years.

    I feel fairly sure that the Ombudsman would have upheld the complaint and Ulster Bank would have had another finding against them registered when the name and shame stats are published. But this now falls into the category of "settled before determination by the FSO".

    When the Ulster Bank systems crashed in 2012, the bank proactively settled all the complaints generously. I heard somewhere that only 2 complaints were made to the FSO over the issue.

    Many complaints have been made to the FSO over the Danske Bank offset mortgage issue. Danske has now made a fair offer to those customers. However, some of them are not happy. I am quite sure that the FSO will consider the Danske proposal reasonable and so a whole raft of complaints will be deemed as "not upheld". However, without the FSO system, these customers would have simply lost their offset mortgages.
     
  10. barneyg

    barneyg Registered User

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    It seems from looking at the thread over on Boards that the FSO has upheld some of the complaints about the danske offsets.
     
  11. Bronte

    Bronte Frequent Poster

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    Both Gerry Canning and Monksfield sound disappointed to me.

    Yes Twofor1 did a great analysis but he actually doesn't know how many cases settled are as a percentage.

    You yourself said it is a long drawn out process, I did it myself and have nothing positive to reply about the process (I did get a tiny financial sum on two occasions, but they no way, in my mind paid me back for the effort of the complaint, never mind that my complaint was not fully upheld)

    I believe the process is designed to wear you down from beginning to end. And that there is therefore a high attrition rate. With the power and money of the banks the ombudsman should of course be fair, but should make the procedure much easier for the little guys.

    It is only very tenacious people like twofor1 who are going to succeed. That is the problem.
     
  12. Brendan Burgess

    Brendan Burgess Founder

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    I questioned Bill Prasifka about the low rate of complaints upheld at a conference recently.

    He said that the UK Ombudsman includes all complaints settled before he makes a decision as "complaints upheld". He is going to provide these figures next year, I think.

    He also said that there has been a sea change since he started naming and shaming. The directors of the financial institutions have asked to meet him to see what they can do to improve their performance.

    He was also very clear. He makes his decision based on the facts of the case. If that results in a 10% success rate or a 90% success rate, so be it.

    He said that some people have claimed that the 90% rejection rate suggests that a lot of the complaints have no basis at all. He rejected that too. In many cases, the customer simply does not understand the product or the terms and conditions and, in effect, his finding explains it to them.

    Brendan
     
  13. twofor1

    twofor1 Frequent Poster

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    The Financial Services Ombudsman’s Annual Review for 2014 now shows complaints upheld, partly upheld, not upheld and settled in one graph.

    45% of complaints in 2014 had some form of customer redress where the complaint was either upheld, partly upheld or settled.

    55% of complaints were not upheld.

    Previous year’s figures are on average slightly better for the customer.


    Section 4.2, page 27 here:

    https://www.financialombudsman.ie/publications/FSO Annual Review 2014 Digital.pdf
     
  14. Bronte

    Bronte Frequent Poster

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    Well if that's the case it would seem customers are buying products they don't understand and they probably should never have been 'helped' to buy them.
     
  15. twofor1

    twofor1 Frequent Poster

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    Looking further at the report, I think the real figure is probably a lot higher than 45% as apart from the 3,174 cases that were upheld, partly upheld, not upheld or settled, there were a further 1,234 cases that were closed in 2014 due to no further contact from the complainant.

    Admittedly we will never know, but I would guess that many if not most of these were settled satisfactorily for the complainants when the providers realised the FSO was involved, but the complainants didn’t bother notifying the FSO.

    Here’s what the FSO says on this issue;

    ‘’*In some cases complaints are settled between the provider and the customer during the course of the investigation, however the FSOB will only note a case as settled where the Complainant confirms that this is the case. Although we prompt for responses from the Complainant, unless we hear to the contrary, then the case is ‘closed due to no further contact from Complainant’’


    Section 4.4, page 31.

    https://www.financialombudsman.ie/publications/FSO Annual Review 2014 Digital.pdf
     
  16. Gerry Canning

    Gerry Canning Frequent Poster

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    Disagree .

    Think about it , most complaints arose in the (fluffy) times 2002 through to 2008.
    These are outside of the Remit of FSO, due to the 6 year rule.
    By FSO,s own presentations to committees they consider they are (bound) more by letter of law rather than Spirit of Law.
    Upshot is that FSO is inclined to take a narrow view of their remit.
    Cases that show this ; eg, in the way PPI Insurance mis-selling is adjudicated on here versus UK.

    May well be the FSO,s powers are ham- strung but I do not think they are to be trusted to act well for complainants.
     
  17. twofor1

    twofor1 Frequent Poster

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    Last edited: Feb 26, 2015
    Hi Gerry,

    The FSO is now presenting his statistics in a similar fashion to other Financial Services Ombudsman Offices.

    As a result, the facts appear to back up what I had maintained starting this thread, that he is far more successful for the consumer than he is typically given credit for.

    My reading from the 2014 report is that at least 45% of complaints are upheld, partly upheld or settled to the complainants satisfaction directly as a result of the FSO’s intervention.

    This is substantially better than the 10% that is frequently quoted.

    I think this positive 2014 report should encourage people to take their complaints to the FSO, and I would encourage anyone with a grievance to do so.
     
    Last edited: Feb 26, 2015
  18. Brendan Burgess

    Brendan Burgess Founder

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    upload_2015-3-2_11-31-38.png
    The 29% settled is a very interesting figure. Much higher than I would have thought.

    I don't think that the 11% for "partly upheld" should be included. I have seen a few of these cases, and the complaint is rejected, but they get some derisory amount of money for maladministration or something else. For example, if you lost a tracker and moved to another lender as a result. The Ombudsman ruled that you should not have lost your tracker and awards you €5,000 compensation, how would you feel?

    Brendan
     
  19. Brendan Burgess

    Brendan Burgess Founder

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  20. Brendan Burgess

    Brendan Burgess Founder

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    So taking all these together

    upload_2015-3-2_11-44-38.png

    Complainants gave up in 27% of cases. This is very worrying.