The Financial Ombudsman Service (FOS) received a record 39,479 disputes in the 2016/17 year, up 16 per cent from last year, with the increase driven by continued growth in general insurance disputes.
FOS’ annual review showed the number of general insurance disputes received increased by 2,612 to a total of 13,200, accounting for about 38 per cent of the overall increase.
FOS attributed the increase to various factors including industry-specific issues including higher claim numbers, organisational changes and the impact of Cyclone Debbie, all of which may have impacted insurers’ internal dispute resolution.
The ombudsman accepted 1,292 investment and advice disputes in 2016/17, up 13 per cent from last year. Of these, a quarter involved mixed asset funds (investing in multiple asset classes such as cash, bonds, shares, and property), while the main issue was inappropriate advice (24 per cent).
The number of life insurance disputes reduced by seven per cent, with FOS accepting 1,018 disputes, going against the trend of record dispute numbers lodged with FOS.
Denial of claims (26 per cent) was the most common reason for consumers lodging disputes. Denial of claim was more common within income stream risk disputes (30 per cent) than non-income stream risk disputes (25 per cent).
Despite the record number of cases FOS said it reduced the average time taken to resolve disputes by 13 per cent, and 43 per cent from the previous year. It resolved disputes in an average of 54 days in 2016/17 compared with 62 days last year, while it closed 44 per cent of disputes in 30 days.
FOS said the record number of disputes put pressure on staff workloads and it saw queues re-emerge in the second of the year. As a result, FOS recruited additional ombudsmen and other staff to handle the high volume of disputes.