The Financial Ombudsman Service (FOS) recorded 7720 complaints in the second quarter, down 7% on the preceding three months and 4% on the corresponding quarter of last year.

General insurance disputes accounted for 28% of cases – or 1579, down from 2171 in the first quarter.

FOS says 8954 disputes were closed in the quarter, up 6% on the preceding quarter and 5% on the corresponding quarter last year. Of these, 66% were resolved through an agreement between the financial services provider and the consumer.

Chief Ombudsman Shane Tregillis says on June 15 FOS eliminated its dispute backlog.

“This means there are no disputes that have been unallocated for more than seven days at any stage of the FOS dispute process – a significant achievement.”

FOS shifted to a new dispute resolution process on July 1.

It features a new system for fast-tracking decisions on simpler and low-value disputes, and a registration and referral process to give financial services providers a final chance to resolve disputes with customers before intervention.

FOS’ latest newsletter again warns financial services providers the service can compensate consumers for non-financial loss arising from poor management of claims, such as unreasonable delay.

“The maximum amount FOS can award for non-financial loss is $3000 per claim. FOS may also decide a non-financial remedy, such as a letter of apology, is appropriate.”

However, FOS can award more than $3000 in total in a dispute if a consumer or policyholder has several claims.

In one case, FOS awarded total compensation of $6000 for three separate claims to a person who was the subject of harassing phone calls from a financial services provider to recover a debt. 

In one week in November, the provider made 24 calls to the person and sent one collection letter, plus made more calls in December and January. 

FOS ruled that the provider had breached official debt collection guidelines and caused significant stress.

The case is outlined in a new document intended to help consumers and financial services providers better understand how the agency reaches decisions about key issues.

FOS awards compensation for non-financial loss such as an unusual amount of physical inconvenience, time taken to resolve a situation or interference with a consumer’s expectation of enjoyment or peace of mind.

In a privacy dispute the service may award compensation if the consumer has suffered humiliation or injured feelings.