The Financial Ombudsman Service (FOS) has experienced a sharp increase in disputes over the quality of advice and service customers are receiving.
According to the FOS annual report, the total number of disputes across the sector jumped by 16 per cent to a record 39,470 in the 2016-17 financial year.
This followed a 7 per cent increase the year before.
The mounting community anxiety about the treatment received from financial service businesses can also be seen in the increase in phone inquiries which rose by 10 per cent to 235,372 over the year, or almost 1,000 calls a day.
Visits to the ombudsman's website rose by 13 per cent to more than 675,000 for the year.
Chief ombudsman Shane Tregillis said the increased workload meant extra staff had to be put on, but it also led to some queues in dispute resolution remerge.
Mr Tregillis noted much of the work was dealing with systemic issues, rather than just one-off problems.
"We identified and referred 192 possible systemic issues to financial services providers for response and resolved 66 definite systemic issues," he said.
"More than 940,000 customers were affected by these systemic issues, leading to significant refunds and other remedies such as amendments to, or removal of, credit listings."
What the disputes were about
| Category | Number of disputes | Percentage change (YoY) |
| Credit | 10,973 | +43pc |
| General insurance | 8,756 | +35pc |
| Deposit-taking | 1,861 | +7pc |
| Payment systems | 1,331 | +5pc |
| Investments and advice | 1,292 | +5pc |
| Life insurance | 1,018 | +4pc |
Of the credit disputes, roughly one third involved credit cards, while a quarter involved home loans and 20 per cent were about personal loans.
The major complaint in the investments sector was inappropriate advice, while almost half the complaints in life insurance centred on income protection product and a quarter involved the denial of a claim.
Mr Tregillis said the rise in general insurance disputes appeared to have been caused by recent changes specific to the sector.
"Higher claim numbers, organisational changes and the impact of Cyclone Debbie, all of which may have affected insurers' internal dispute resolution," he said.
Not surprisingly banks attracted the lion's share of complaints, with 41 per cent of all disputes — although this was 3 per cent down on the previous year.
