Endowments: better outcomes for consumers but no room for complacency, says FSA
11th December 2006A report published today by the Financial Services Authority (FSA), shows that consumers are getting better outcomes in the way their mortgage endowment complaints are handled. But the FSA stressed that there is no room for complacency.
The report sets out how the FSA has been working with firms to improve the speed and quality of mortgage endowments complaint handling for consumers.
Since July 2005, the FSA has been looking at how 52 firms, covering 90% of the mortgage endowment market, handle complaints. It had concerns with 22 firms and 14 of them have taken or are taking remedial action to improve the quality of their complaints handling.
As a result of this work:
- More than 100,000 complaints previously rejected have been or are being reviewed. Around 75% of those reviewed so far have been decided in the consumers' favour and over 120 million GBP in compensation paid in these cases;
- Consumers are getting decisions made more quickly. The number of complaints taking more than eight weeks to resolve has fallen from 33,000 in September 2005 to 7,000 in September 2006;
- The quality of firms' decisions is improving and so the Financial Ombudsman Service is having to uphold fewer complaints in consumers' favour.
The FSA is also urging firms to plan ahead. This includes proactively helping consumers who cannot avoid shortfalls set up sensible repayment plans when their policies mature.
Vernon Everitt, FSA Retail Themes Director, said:
"It is encouraging that firms have improved the speed and quality of how they handle complaints. News of a potential shortfall is a major worry for consumers and firms owe it to them to deal with their complaints quickly and fairly. We are keeping a close eye on this to make sure that firms continue to do just that. Firms must also look ahead and not focus solely on the here and now. They need to pay particular attention to helping people deal with shortfalls when policies mature."
The report also sets out how the FSA is reaching the 100,000 consumers who still think they cannot afford to deal with their shortfall. In April 2006, the FSA published a new factsheet 'Will your investment or savings plan pay off your mortgage' to help consumers understand the options available. The FSA is working with firms, advice agencies and press to ensure that consumers get this message.
Further information to help consumers is available on the endowment mortgages section of the FSA consumer website.
