Financial firms in Britain paid out £2.25 billion ($3.56 billion) in compensation to wronged clients in the second half of 2011, according to the latest data from the UK Financial Services Authority.
The FSA Wednesday published complaints data for the second half of last year. The amount of redress represented a large jump from the £411 million paid out in the first half of the year, and was driven by an increase in redress paid for general insurance and pure protection to £2.1 billion, which the FSA notes was affected by firms resolving the complaints about the mis-selling of payment protection insurance that were placed on hold during a judicial review in the first half of 2011.
By contrast, Canada’s Ombudsman for Banking Services and Investments reports that the banks and securities firms that belong to its service paid out a total of just under $3.2 million in compensation in 2011. The insurance ombudservices do not report compensation numbers.
The FSA also said that the percentage of complaints upheld during the second half rose to 60%, up from 51% in the first half of last year. By comparison, only 26% of OBSI complaints resulted in monetary compensation in 2011.
The total overall number of complaints in the UK increased by 21% to 2.26 million in the second half, driven by a rise in the volume of complaints about insurance, particularly PPI. The number of banking complaints were at their lowest level since the second half of 2006 at 787,096, down 2% from the previous half year and down 13% from a year ago.
In addition to the aggregate data, the FSA also reports firm-specific complaints data for firms with at least 500 complaints during the period. “Publishing this data brings complaints to the attention of firms and consumers alike, and gives firms a benchmark and an incentive to improve how they treat their customers and handle complaints,” it says.