Sometimes things will go wrong. But when that happens, we want people to be put back in the position they should have been in.
Whenever possible, we want the firms responsible for the harm to be the ones to put things right. This means we need a redress framework that delivers redress at the earliest possible point. Where possible, consumers should be repaid swiftly by the firm which caused them harm without them having to complain.
If a consumer makes a complaint, the firm should resolve it as effectively as possible to avoid further costs to the consumer, business or the wider industry.
Confidence
confidence icon
Outcome 1: The redress system delivers timely and fair complaint resolution and compensation to consumers
|
Metric code |
Metric description |
Source |
Baseline Value |
Year 1 values |
Year 2 values |
Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
|
IRF2-M01 |
Increase in the overall timeliness of firms’ complaint resolution measured by the proportion of complaints closed within 3 days, between 3 days and 8 weeks, and after 8 weeks |
Complaints closed within 3 days: 48% (2021) |
Complaints closed within 3 days: 49% (2022) |
Complaints closed within 3 days: 45% (2023) |
Declined |
|
|
Complaints closed after 3 days but within 8 weeks: 42% (2021) |
Complaints closed after 3 days but within 8 weeks: 46% (2022) |
Complaints closed after 3 days but within 8 weeks: 47% (2022)
|
||||
|
Complaints closed after 8 weeks: 9.5% (2021) Baseline has been adjusted to also include 2021 H1 figures to give the total % for 2021 |
Complaints closed after 8 weeks: 5.5% (2022) Note- slight sum error due to rounding methodology used (i.e. round numbers 10-90, 1dp <10 & >90) |
Complaints closed after 8 weeks: 7.7% (2022) Note- slight sum error due to rounding methodology used (i.e. round numbers 10-90, 1dp <10 & >90)
|
||||
|
IRF2-M02 |
Increase in complaints upheld by firms, measured by complaints upheld by firms from FCA complaint data |
59% (2021) |
60% (2022) |
61% (2023) |
Little or no change |
|
|
IRF2-M03 |
Metric under development: Increase in instances of firms putting things right by themselves |
|
|
|
|
Not assessed |
Outcome 2: Firms that create redress burden bear the associated cost themselves
|
Metric code |
Metric description |
Source |
Baseline Value(s) |
Year 1 values |
Year 2 values |
Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
|
IRF3-M01
This metric uses the same data as topline metric CCO2-M01[2] |
Stabilisation of the redress burden from insolvent firms’ unpaid liabilities through FSCS claims over a multi-year period, with a view to a subsequent reduction |
28,007 new claims (2020/21) |
24,709 new claims (2021/22) |
21,067 new claims (2022/23) |
Improved |
|
|
43,407 payments made (2020/21) |
62,380 payments made (2021/22) |
67,908 payments made (2022/23) |
||||
|
£584m compensation payments (2020/21) |
£584m compensation payments (2021/22) |
£403m compensation payments (2022/23) |
||||
|
IRF3-M02 |
To stabilise the overall FSCS levy bill, with a view to a future reduction, and to minimise calls on the Retail Pool, which represents the cost which industry levy payers need to meet |
Total Levies firms paid £700m (FY 2020/21) |
Total Levies firms paid £717m (FY 2021/22) |
Total Levies firms paid £625m (FY 2022/23) |
Improved |
Outcome 3: Consumers understand the redress system and how to access it
|
Metric code |
Metric description |
Source |
Baseline Value(s) |
Year 1 values |
Year 2 values |
Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
|
IRF4-M01 |
Increase in proportion of consumers who are aware they can make a compensation claim for mis-selling of a financial product or service directly, without using a Claims Management Company (CMC) |
63% of consumers (2020) |
55% of consumers (2022)
|
58% of consumers (2023 re-contact survey) Difference between year 2 and baseline value is statistically significant.
|
Declined |
Fair value
Fair value icon
Outcome 4: The Claims Management Companies (CMC) sector delivers fair value
|
Metric code |
Metric description |
Source |
Baseline Value(s) |
Year 1 values |
Year 2 values |
Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
|
IRF1-M01 |
An increase in the proportion of consumers who made a claim in the last 3 years and used a CMC for their most recent claim who consider that the service met their expectations |
57% of consumers (2022) |
Between 25% and 47% of consumers (2023 re-contact survey) Difference between year 2 and baseline value is statistically significant. We are reporting a range rather than a single result here due to a low sample size of those who used a CMC in the last 3 years in the Financial Lives Survey May 2023 recontact survey. |
Declined |
||
|
IRF1-M02 |
An increase in the proportion of consumers who made a claim in the last 3 years and used a CMC for their most recent claim who consider that the fee they paid was fair |
39% of consumers (2022) |
Between 17% and 39%of consumers (2023 re-contact survey) Difference between year 2 and baseline value is statistically significant. We are reporting a range rather than a single result here due to a low sample size of those who used a CMC in the last 3 years in the Financial Lives Survey May 2023 recontact survey. |
Declined
|
||
|
IRF1-M04 |
Increase over time in CMC-represented Financial Ombudsman Service complaints that are upheld |
34% uphold rate (2021) |
43% uphold rate (2022) |
35% uphold rate (2023) |
Little or No Change |
What the latest metric values tell us
Metric IRF2-M01 tracks how quickly firms resolve complaints. Complaints handling times got slightly longer in 2023, although the percentage of consumers waiting over 8 weeks for their complaint to be resolved remains below 10%.
IRF2-M02 is related, looking at the proportion of complaints which firms have upheld directly, and has improved marginally from 60% in 2022 to 61% 2023. We intend to issue guidance to firms on how they can improve the ways they handle redress issues, which in the longer term we hope will improve this metric.
Metrics based on complaints will always be ‘after the event’. They are lagging indicators and it will take some time before the impact of our work begins to show. FSCS claims may also be affected by other drivers of firm failure — such as economic conditions.
Metrics IRF3-M01 and IRF3-M02 track the number of claims to the FSCS, the total paid out by the FSCS in compensation and the related levy bill. The number of claims, payments and total redress being paid by the FSCS is decreasing. However, FSCS costs include past misconduct that happened on average 5-10 years ago, and there are still existing liabilities in the pipeline. FSCS compensation costs are also driven in part by wider economic factors that are outside of our control, for example redress on pension transfers is heavily impacted by forecasted future inflation inferred from gilt yields.
We also expect firms’ financial resilience to weaken due to the economic situation, which could lead to a lagged increase in redress linked to firm failure and misconduct.
Metric IRF1-M04 tracks the number of Claim Management Company (CMC) -made complaints upheld by the Financial Ombudsman. The percentage of these complaints that are upheld has seen little or no change, although the metric remains marginally above the 2021 baseline. This is a relatively recent metric and it is difficult to know if the past year’s decrease is a wider trend or consistent with previous variation.
Metrics IRF1-M01 and IRF1-M02 show a fall in consumer satisfaction in CMC’s service and fees. While sample sizes are low, this change suggests that consumers have become less satisfied with CMC service and charging over time. Some CMCs are not FCA authorised and are regulated by the Solicitors Regulation Authority. So our metrics will only reflect part of the consumer experience. We will continue to monitor this trend.
Metric IRF4-M01 measures the proportion of consumers who know they can make a compensation claim for mis-selling directly, without using a CMC. Over the past year this has increased to 58% (from 55% in 2022) but remains lower than the 63% in 2020. Higher awareness in 2020 is likely to be linked to the deadline for complaining about PPI, which was in August 2019 — just before the fieldwork for the 2020 survey started. There was significant advertising by both the FCA and CMCs in the run-up to the deadline. We will continue to monitor the metric to identify if the trend represents a stabilisation or longer-term improvement.