Statement on proposed changes to Financial Ombudsman Service business complaints records

Complaints are currently recorded as either having had a ‘change in outcome’ if the complaint is resolved by the FOS with a more favourable outcome for the complainant than when it was referred, or ‘no change in outcome’ if the FOS finds the complaint to be invalid or agrees that any outcome already proposed by the business to be fair. The complaints ‘uphold rate’ reflects the percentage of complaints resolved with a ‘change in outcome’.

The proposed amendment will see the introduction of an additional third category known as ‘proactively settled’, representing instances where a complaint is resolved by a ‘fair and reasonable offer put forward by a business within 14 days of [it] requesting the respondent business’s complaints file’.

‘Proactively settled’ cases would not contribute to a business’ overall ‘uphold rate’, which reflects the percentage of complaints resolved as ‘change in outcome’. Research from FOS suggests the incentive to keep a low uphold rate will lead firms to settle complaints pragmatically at an earlier stage, without the need for a full investigation by an investigator or ombudsman.

On what this means for the insurance industry, Dr Matthew Connell, Policy and Public Affairs Director a the CII, issued the following statement: "Resolving complaints as efficiently and fairly as possible is a key element of consumer trust. In our research with consumers, the statement ‘the company handles complaints professionally and fairly' ranks 6^th out of 37 statements about trust for consumers.

"It is important to remember, however, that resolving a complaint fairly is more important than resolving it rapidly. Sometimes, for example, it is important to give customers time to take stock of their rights and options before finalising an agreement – as with the test case on business interruption during the pandemic."