Insurers and holiday firms top consumers’ list of complaints amid pandemic

Linda J. Dodson

The national complaints arbiter for financial firms has received a flood of complaints about insurers and travel companies, after consumers struggled to claim payouts and refunds for cancelled holidays and other events amid the coronavirus outbreak. 

The Financial Ombudsman Service received 271,468 complaints in 2019-20. The annual figures, published on Wednesday, were recorded up to April and capture only a proportion of Covid-19-related complaints. The mediator said it expected the number to increase, following a string of inquiries about coronavirus and financial concerns from the public.

It recorded more than 32,600 complaints about insurance companies over the financial year. A large number of these followed the two large storms Dennis and Ciara, which caused severe flooding and damage to businesses and homes.

Around 4,000 claims were made at the time, according to the trade body the Association of British Insurers, and more than £100m paid out, with the average payout for claims on homes amounting to £31,000 and £70,000 for businesses. 

More recently consumers complained about travel insurers, which stopped selling cover altogether as the virus spread and travel restrictions were introduced.

There was also a cluster of complaints from people attempting to make claims under Section 75 of the Consumer Credit Act and charge back money to their credit card for goods and services that had not been provided.

The ombudsman said a large number of those related to cancelled flights and holiday bookings, with spikes following the collapse of travel company Thomas Cook and airline Flybe.

Telegraph Money has reported on a number of firms, including British Airways, pushing customers towards accepting credit vouchers to be used at a later date, instead of processing full refunds for cancelled services, which is a consumer right. 

Overall the number of complaints consumers made fell year on year by 30pc, down from 388,392 in 2018-19. The decline was mainly caused by the passing of the “statute of limitations” deadline on missold PPI (payment protection insurance) complaints. PPI is historically the most complained about product. 

Carloline Wayman, of the FOS, said there were still numerous instances of financial firms failing to uphold consumer rights. 

“We shouldn’t let past mass claims skew our sense of what’s acceptable. No one should be comfortable with the current volume of our casework,” she said. 

The mediator also received a large number of complaints relating to the Neil Woodford scandal, with almost 11,000 complaints about investments and pensions made overall.

The new figures come exactly one year after the suspension of the Woodford Equity Income fund, which the authorities were eventually forced to shut down following a string of disastrous investments.

Hundreds of thousands of investors were affected, with many losing large chunks of their life savings. More than half a billion worth of unlisted assets remain to be sold and returned to investors. 

Source Article

Next Post

How Clorox built a DTC brand with the resources of a CPG giant

Consumer packaged goods (CPG) giants have been developing direct-to-consumer (DTC) capabilities because of the high-growth potential and the way that first-party data allows for deeper consumer relationships. But major marketers have made this move in different ways: Unilever has completed large acquisitions, like of Dollar Shave Club, while Procter & […]