Financial complaints reach a record high in Scotland SO what are we most likely to complain about and what are the chances of success if we do? asks Jeff Salway Scottish complaints to the Financial Ombudsman Service hit a record high last year as more people took companies to task over problems with products and services, from car insurance to mortgages. The ombudsman, which mediates in disputes between consumers and financial services companies, received an unprecedented 17,007 complaints from people in Scotland in 2011, up almost half on the amount in 2010, Smart Money revealed last week. And more people are finding success, claiming compensation for everything from mis-selling and investment rip-offs to misleading policy wording and administration problems. The rise in cases going to the FOS is not due entirely to financial services providers giving more cause for complaint, however. It seems Scots are less prepared to put up with perceived poor products and services than they used to be, while raised awareness of the FOS, which began operating just over a decade ago, has encouraged more people to fight back against companies they believe have let them down. Here are the products that Scots are most likely to complain to the FOS about, the issues being disputed - and the chances of success if you do complain: More than 1,300 Scots complained to the FOS about credit card accounts in 2011. Most were people in financial hardship, according to the ombudsman, with charges the most common cause of dispute. In many cases, cardholders who were taken above their monthly limit by charges and debit interest contacted their provider for help but were not given any, in their view, exacerbating their financial difficulties. A common cause for complaint is issues around section 75 of the Consumer Credit Act 1974, which states that people who have a claim against a supplier or retailer will usually have an equal claim against the credit card issuer. Section 75 applies where a credit card is used to make purchases of between £100 and £30,000 and gives the cardholder extra protection if the retailer goes bust. And with more retailers and travel firms going to the wall in recent times, many consumers have turned to credit card issuers to recover money spent with those firms. If you need to make a claim there's a template letter you can download at https://consumer-tools.direct.gov.uk/consumer-advice/template_letters/consumer_credit and send to your credit card provider. Scotland's housing market may be subdued but more people are entangled in disputes with lenders, according to the ombudsman. The reason for this is the impact on struggling homeowners of the pressure on household incomes, with more people falling behind on repayments even as interest rates remain low. The accusation in such cases is that lenders are failing to treat homeowners in arrears fairly or not giving them sufficient flexibility, but a large proportion of these complaints are being ruled in favour of mortgage providers. Early repayment charges (ERCs) and mortgage porting (transferring a loan to a different property) are also causing a lot of disputes. More Scottish homeowners are seeking to overpay their mortgages while interest rates are low, but the FOS evidence underlines that lenders are trying to claw back the lost revenue by charging customers who have paid their debts off early. Such charges are hard to avoid if they are included in your mortgage contract, although some mortgages come without such tie-ins. The rate may be slightly higher but if you want the flexibility to move or pay if off quicker it may be worth it as ERCs can be hefty, as more homeowners are finding out. Current account complaints from Scots fell 36 per cent last year, but that was due primarily to a drop in complaints about overdraft charges following a spike in the wake of a ruling on bank charges two years ago. However, problems with current accounts still take up much of the FOS workload, with more complaints from people in financial difficulties about one-off charges imposed by banks. Many issues relating to banks are about administration, with complaints about the set-up, transfer or closure of accounts. Disputed transactions are also prominent, with disagreements over unrecognised transactions and alleged fraud among the reasons behind Scottish complaints. There's been a significant increase in more complex complaints about joint accounts too, as a result of relationship breakdowns, often where one party has cleaned out the account. There was a 72 per cent rise - to almost 14,000 - last year, in the number of complaints from people in Scotland about controversial payment protection insurance (PPI). Widespread mis-selling of the policies - designed to cover loan or mortgage repayments in the event of being unable to work due to illness or unemployment - led to a belated regulatory crackdown and a series of legal challenges that finally came to an end last May. That's when the banks conceded defeat in their bid to overturn new rules under which they have to revisit PPI sales dating back to 2005. Most complaints are from people believing they have been conned into taking out PPI, not told of the costs or sold a policy on which they would never have been able to claim. The FOS upholds around seven in 10 cases in the consumer's favour, so if you feel you have been wrongly sold PPI the chances are you are eligible for a full refund. You can't apply for one if you have made any claims on your policy, however. The rights over complaints have been distorted by some claims management companies, which take a cut of the compensation payout for taking cases to the FOS. The ombudsman has reported complaints through claims handlers from people who have never even taken out PPI. If you believe you could be in line for a payout, take your case straight to the FOS and not to a claims management firm, which could take around a quarter of your payout as commission. There was a 25 per cent hike last year in new complaints to the FOS from people in Scotland about car insurance. Many were related to a sharp increase in claims resulting from collisions and other weather-related damage during the harsh winter of 2010-11. However, the FOS also reported a rise in complaints about vehicle valuations, where consumers have been quoted a "trade price" for a vehicle - the amount the dealer would pay - rather than the retail price that a car in a similar conditions would cost. This affects insurance payouts because they are based on a market value that is likely to be lower than the policyholder might have expected. If the insurer offers the full retail value rather than the trade value, the FOS is highly unlikely to uphold an insurance complaint based on the valuation. Also more common are disagreements between insurers and drivers where the former dispute their liability for reasons such as the keys being left in the car - a particularly common sticking point during winter, when drivers are more likely to leave their car unattended to warm up. How to file a complaint with the Financial Ombudsman The first step when making a complaint is to do so to the company concerned, in writing or by e-mail. Keep a note of anything you send, the date, your complaint number and any correspondence during the process. If the company fails to respond satisfactorily within eight weeks you can take the matter to the Financial Ombudsman Service (FOS), which mediates in disputes between consumers and financial firms, including banks and building societies. Do it within six months of the eight-week deadline expiring, however, or it'll be too late. The FOS can be contacted on 0300 123 9123 or 0800 023 4567 between 8am and 6pm, Monday to Friday, and by e-mail at complaint.info@financial-ombudsman.org.uk. Its website, www.financial-ombudsman.org.uk, has information on your rights, what it can and cannot adjudicate on, the process of filing a complaint and a complaints form that can be downloaded and sent in.