OFT finds poor service costs consumers £6.6bn

16 April 2008

Financial services account for nearly half of problems

Over the past 12 months, bad service and faulty products have cost UK consumers around £6.6bn according to research published by the Office of Fair Trading (OFT).

The OFT consumer detriment study was based on information collected from over 10,000 consumers and found that 34% of those surveyed had experienced at least one problem in the past year.

For each 1,000 people interviewed by the OFT researchers, 542 problems were reported. If this ratio were projected across the entire UK population it would suggest that there were 26.5m occasions when customers suffered because they were treated unfairly by a company.

According to the report, 55% of problems resulted in a loss of £5 or under for the consumer, and 4% resulted in losses of over £1,000.

Additionally, complaints were more common when the loss was larger, with 70% of consumers saying they had taken action if they had lost more than £5.

The OFT reported that the financial service sector accounted for 45% of all problems reported with insurers responsible for the most detriment to consumers, followed by companies selling home maintenance and improvements services and then those selling personal banking products.

Speaking about the report, the OFT said it would help when it comes to prioritising future work.

John Fingleton, chief executive of the OFT, said: “Consumer confidence in markets is important to making markets work well and maintaining a strong and growing economy.

“Understanding where consumers are experiencing the most problems and incurring the greatest losses will help us to set priorities efficiently and focus the work of the OFT on markets that are not working well.”

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