Investment disputes put forward to the Financial Ombudsman Service (FOS) achieved a 14 per cent decrease in the 2011-2012 financial year, according to the FOS annual review.
According to the review, the decline of investment disputes to 1,626 year-on-year indicates that disputes are dropping back towards pre-global financial crisis (GFC) levels.
But FOS expressed concern at the increase in the number of members involved in these matters becoming insolvent.
“Numbers have more than doubled in the comparable periods, jumping from seven members in 2010-2011 to 18 in 2011-2012,” chief ombudsman Shane Tregillis said.
“The upward trend we’ve seen in the number of members going into administration or liquidation has meant that we have either turned applicants away, or applicants have remained uncompensated – where favourable decision has been issued.
“FOS continues to be concerned about the impact of this on applicants, and the effectiveness this has on our external dispute resolution service to these individuals,” he said.
Overall, the review of those disputed in all sectors showed a continued increase in disputes going to and being resolved by FOS in the past year.
“[But] the composition of disputes has also changed over the last few years, with credit products and disputes lodged by people in financial difficulty making up a larger proportion of those we handled,” Mr Tregillis said.
In 2011-2012, FOS received a total of 36,099 disputes, up 19 per cent on the previous year.
FOS accepted 25,298 disputes into its formal dispute resolution process, where a customer had not been able to resolve a dispute directly with their financial services provider. This was up 24 per cent on the previous year.
During the year, FOS resolved 24,983 accepted disputes, which was up 31 per cent on the previous year.
“In the last year, disputes resolved by agreement between parties rose to 74 per cent, up from 71 per cent in 2010-2011,” Mr Tregillis said.
“This reflects our focus on the importance of early, cooperative resolution, which includes working with applicants and financial firms to reduce the time taken to resolve disputes,” he said.
