Financial Ombudsman Service secures up to £22 million in redress for consumers

The Financial Ombudsman Service has published the results of a temporary outcomes code initiative launched in November 2021 aimed at encouraging businesses to proactively settle complaints more quickly.   

The work by the Financial Ombudsman and more than 90 businesses has resulted in 6,877 offers being made to customers and secured up to £22 million in redress for customers . This included more than £10 million of redress in “authorised” scam complaints, with over 2,000 victims being refunded the money they had lost. The average offer to customers made through the initiative was £3,200 per case.

Alongside the 2,000 fraud cases, the Financial Ombudsman’s initiative has helped resolve around 4,800 customer complaints about a wide range of issues including e-money services, personal loans, motor finance and credit card purchases.

Nausicaa Delfas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said:

We are delighted that many financial businesses have responded to our initiative and have helped customers get their complaints resolved more quickly. This was just one of a range of initiatives we put in place to address the large backlog of complaints received during Covid-19. The backlog is now a third of what it was at the beginning of last year.  We are now moving forward with our Action Plan to change and improve the Financial Ombudsman for the future.

The outcome codes initiative began in November 2021 and finished at the end of March 2022. For a limited period, complaints that were proactively settled by businesses before the Financial Ombudsman Service had issued its opinion did not count towards the business’s ‘uphold rate’ (the proportion of claims against the business that were successful). 

The top ten financial businesses who made offers to customers as part of this initiative are:

Proactive engagement from businesses

We would like to recognise that some businesses, including Nationwide, Barclays and NatWest, had also already resolved significant numbers of cases proactively during this last financial year, before the initiative started.  As such, those cases are outside the scope of the figures reported here.

Background information about the initiative

This was an initiative that put in place temporary changes to the reporting of the outcomes of proactively settled complaints. For a limited period (1 November 2021- 31 March 2022), those complaints that were proactively settled by the firms were not recorded as “upheld”, and did not count towards the business’s uphold rate. 

This was a tactical initiative to help to drive down the unallocated backlog that resulted during 2020/21 – which has now reduced to 34,000, down from 90,000 at April 2021. Full details can be found on our website.

About the Financial Ombudsman Service

The Financial Ombudsman Service was set up by Parliament to resolve individual complaints between financial businesses and their customers on a fair and reasonable basis, as an alternative to the courts. It can look into problems involving most types of money matters from payday loans to pensions, pet insurance to PPI. It is committed to sharing insight and experience to encourage fairness and confidence in financial services.