Financial complaints soar

Consumer complaints received by the Financial Ombudsman service have soared.

The Ombudsman, which has the power to fine errant firms, received 62,000 new complaints last year, a 44% increase on the figure for the previous year.

The biggest rises in numbers of complaints were recorded in the banking, insurance and investment industries.

Faltering stock markets and firms failing to live up to customer service promises have been blamed for the increase.

The Ombudsman service said the continuing increase in complaints reflected people's rising expectations of financial services companies.

"The rift between expectation and reality can quickly open up if firms fail to deliver on these promises - leading to consumer dissatisfaction and complaints," Walter Merricks, the chief ombudsman said.

In nearly nine out of ten cases the complaint was dealt with by mediation, rather than the Ombudsman having to use its power to enforce binding settlements.

However, the Ombudsman warned consumers that they need to consider, when making a complaint, whether they were really mislead or poorly advised or whether they are sharing in the general market decline.