The number of disputes at the Financial Ombudsman Service involving financial difficulty in the year to June was down 12 per cent from with the previous year, and down 37 per cent over the past three years.Lenders' poor handling of financial difficulty cases has been a FOS bugbear for a number of years but the Ombudsman reported in its 2014/15 Annual Review, which was released yesterday, that financial services providers had improved their management of hardship requests.FOS said there was evidence that, with low interest rates, fewer consumers were requesting financial difficulty assistance - but also evidence that financial services providers were more willing to provide assistance when it was requested.FOS's observation backs up the findings of Financial Counselling Australia's 'Rank the Bank' survey, published in April, which gave almost all banks higher ratings for their hardship policies and practices.The number of disputes received by FOS during the 2014/15 financial year rose by one per cent to 31,895. The number of disputes that were closed rose by four per cent to 34,714.After steep increases in dispute numbers between 2009 and 2012, the numbers have been steady over the past three years.FOS chairman Michael Lavarch said this was largely the result of the efforts of industry participants to reduce consumer complaints and improve their internal dispute resolution processes.Lavarch said FOS's new procedures also played a part, giving providers greater opportunity to resolve complaints before they were referred to FOS.In September FOS reported it had implemented all the key recommendations of its most recent independent review. These included a new dispute handing process aimed at fast-tracking more disputes and giving financial services providers more opportunity to resolve disputes before the ombudsman was involved.Ninety-four per cent of FOS's 14,107 members did not have any disputes lodged against them during the 2014/15 financial year. Of those that did, 46 per cent faced only one complaint. At the other end of the scale, there were 54 members with more than 100 complaints lodged against them.Almost half (49 per cent) of all disputes were about credit, and the bulk of those were about credit cards and home loans. Financial difficulty was a common issue in credit disputes, although not as prevalent as in earlier years.Twenty-six per cent of disputes were about general insurance, seven per cent about payment systems, seven per cent about deposit taking and five per cent about investment.The number of applicants using a fee-for-service agent to represent them rose seven per cent, following a 59 per cent increase in 2013/14. In January FOS changed its terms of reference, so that it can refuse to consider disputes lodged by agents if the agent engages in inappropriate conduct.The number of FOS licensee members rose by 0.1 per cent to 4849, while the number of authorised credit representative members fell by 11 per cent to 9258.FOS said the reason for the fall in ACR membership was generally that the businesses ceased to operate.