Endowment complaints initiative brings results, study finds

Close attention to endowment complaints handling since July 2005 has been good news for consumers, according to a progress report by the FSA. The regulator identified 22 firms (out of 52 that represent around 90% of the market) that it believed had problems and instructed 10 to take remedial action. Another four were already working to improve their procedures. Over 100,000 complaints that were previously rejected have now been or are due to be reviewed. To date approximately 75% of the re-assessments have gone in favour of the customer with £120 million paid in compensation. The speed with which issues are resolved has also improved, says the FSA; whereas in September 2005, the number that took more than eight weeks to complete stood at 33,000, 12 months later it had fallen to 7,000. Over the same period, the proportion of complaint decisions overturned by the Financial Ombudsman Service fell from 38% to 24%, which indicates higher quality adjudications by firms. By September 2006, the industry had dealt with over 1.8 million endowment complaints and made compensation payments totalling more than £2.7 billion.