80% spike in mortgage complaints in H1 2012

Data published today by the FSA shows a 80 per cent spike in complaints for mortgage business, rising from 52,722 in the second half of 2011 to 95,363 complaints in the first half of 2012.

Out of these 32,353, 39 per cent of the overall number of mortgage complaints were upheld. Some 78,376, 95 per cent of the overall number of mortgage business complaints, were also dealt with in eight weeks.

Three years ago there were just 14,655 complaints for mortgage business in the first half of 2009, which had doubled to 29,895 by the second half of 2010.

Overall the regulator’s data shows that complaints to financial services firms increased by 59% – largely driven by payment protection insurance.

Complaints about general insurance and pure protection increased by 99% to 2.5 million and within this product group, PPI accounted for 2.2 million of those complaints, an increase of 129%.

The number of banking complaints increased by 5% to 828,040 – within this product group, complaints about current accounts dropped by 13%.

There is no breakdown in terms of whether the complaints about mortgage business have been made to banks, building society or advisers.

Complaints to banks and building societies combined rose from 1.6 million in the second half of 2011 to 2.7 million in the first half of 2012.

General insurance intermediary complaints rose from 265,000 complaints in the second half of 2011 to 431,000 in the first half of 2012.

Equity release complaints doubled from 530 in the second half of 2011 to 1,053 in the first half of 2012.

And arrears related complaints actually fell fractionally from 40,000 in the second half of 2011 to 39,500 in the first half of 2012.

Association of Mortgage Intermediaries chief executive Robert Sinclair says there is not enough information contained within the FSA’s data to know definitively what lies behinds the sudden increase, but it is likely to be a combination of three factors.

He says: Firstly, on-going problems with the time taken to process applications and complete deals – and basic administration errors increasing. Secondly, complaints as lenders will not lend in the same way they did in the past.

“And thirdly, that some claims managers chancing their arm to test the water to see if there is any scope. But on that, feedback to date from our members is that brokers are winning when these are presented to the Financial Ombudsman Service.”