Recommendation 22

The standard complaints-based approach to redress, which relies on consumers seeking compensation themselves, has proved ineffective in the BSPS case. Only 25% of members who received unsuitable advice have raised a claim with redress organisations.69 The FCA told us that it was surprised that more members hadn’t raised a complaint themselves, which highlights a clear lack of awareness of consumer behaviour and the specific vulnerabilities that prevent consumers from seeking compensation directly.70 Similarly, despite the redress process being free to use, 72% of complaints to the Financial Ombudsman and 40% of claims to FSCS were made by BSPS members through claims management companies or solicitors.71 Therefore a very small proportion of eligible BSPS members have sought compensation, and even less have received the full amount of compensation owed to them. This highlights the complex and inaccessible nature of the wider redress system and calls into question its overall effectiveness to provide compensation when things go wrong.