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More woe for insurers as FOS reports record complaints increase

Angry woman complaining and pointing at you

The Financial Ombudsman Service (FOS) heaped more pressure on insurers last week after their annual review revealed the highest dispute figures since their establishment in 2000.

Among the areas of complaint includes motor, commercial and pet insurance with the jump being reported as 20% in non-Payment Protection Insurance (PPI) complaints, a figure which certainly makes for interesting reading when you consider the insurers claims that they have the best interests of the consumers at heart.

Within the 20% non-PPI insurance complaints included an increase of 7% for motor insurance.

The FOS said in its report regarding this rise: “The 7% rise in motor insurance – the largest non-PPI area – in the year to 31 March 2013 followed a 26% increase the previous year.

They went on to add that the proportion of these motor complaints which were upheld in the favour of the consumer was at 47%, which remained higher than in other areas of insurance.

There was also a 60% rise in disputes over non-disclosure by the consumer for motor complaints, which the FOS blamed the insurers for, saying: “Many of these non-disclosure complaints could have been avoided if the insurer had asked the consumer clearer questions when they first applied for the policy.”

Price comparison websites also copped for some of the blame, with the report stating that there had been examples where they had made assumptions about the consumers and added information automatically to the forms.

The report also commented on the advice it had given to the insurance sector regarding the findings saying: “We have talked about this with the Association of British Insurers (ABI) – as part of our work to feed our experience back to the insurance sector – and suggested where insurers might want to remove some of the ambiguity that can arise when consumers use these websites.”

There has been plenty of noise from the insurance sector when it came to influencing the reforms to the personal injury industry, with their main claim being that the changes would be of the benefit of the consumer. But it is clear from the findings in reports like this and the BBC’s Watchdog programme that the consumer’s best interests truly are far from the insurers priorities.

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