Glass reflection of surrounding buildings.

FOS complaints: you win some; you lose some (or only a few; or almost all)

06 September 2011

Today's latest round of FOS complaints data tells the expected tale of woe about PPI complaints but also shows a remarkable disparity between firms' success rates.

There has been a slight improvement in the average success rates for respondent firms as a whole.  Once again, on average, firms are winning more cases than they lose.  The percentage resolved in favour of consumers has dropped from 53% to 47% for the six months to June.

The firm-specific data paints a very mixed picture with uphold rates rangely wildly across the spectrum of the 157 firms that accounted for 93% of FOS complaints.  The most unsuccessful firm lost 98% of cases while the best performer lost just 2%.

In simple terms, any firm scoring below the 47% average should consider taking a tougher stance in its complaints handling as it may not be adequately defending itself from consumer complaints.  Conversely, firms with an above average uphold rate are at risk of regulatory criticism for not handling complaints 'fairly'.

I remain unconvinced about the utility of raw complaints stats without the relevant contextual information but, in a world of KPIs and benchmarking, these simple conclusions are easily drawn and raise (albeit rebuttable) presumptions about a firm's complaints handling.  I would worry if I were the finance director or insurer of a firm that upholds complaints too readily and I would certainly not want to be the senior manager (the 'CF complaints') responsible for complaints handling in a firm that loses almost every case before the FOS. With the FSA keen to enforce its new rules on senior manager responsibility for complaints which came into effect on 1 September, the 'CF complaints' in those firms with the highest uphold rates will make obvious targets.