There has been yet another warning to providers regarding endowment complaints handling procedures, this time from the Financial Services Authority.
They are concerned that in order to make their case processing more efficient, companies are dismissing complaints too swiftly. The FSA has written warning letters to providers, telling them not to use the Financial Ombudsman Service as a cheap alternative to handling the complaints themselves.
Our view
There is increasing pressure on the Financial Ombudsman with over half a million enquiries a year. It is our belief that there should be a volume levy on companies with large numbers of complaints. E.g. First 3 claims (paid for by normal yearly levy - a fixed fee for all) then a scale of fees that escalates per complaint, the more complaints against the firm the greater the cost per complaint.
This will also act as 'stick' to deliver better quality advice.