Persist with a complaint without ruffling feathers

WITH nearly two million complaints made against financial services firms in the first six months of this year alone, the depth of dissatisfaction with the industry is clear.

Yet still too many more people allow their bank, building society, insurer or adviser to get away with poor customer service by failing to fight back – even though the odds of getting a fair hearing are increasingly in the consumer’s favour.

The Financial Services Authority (FSA) last week revealed that total complaints rose by 3 per cent to 1.85 million for the first six months of this year. The increase was due largely to a 23 per cent spike in complaints about payment protection insurance (PPI), after the collapse in May of the banks’ challenge against new FSA compensation rules.

The bailout of the banks following the 2008 crisis – at an estimated cost to taxpayers of about £1.2 trillion – has also meant that more people than ever are prepared to bite back if they believe they’ve been on the end of bad service or been mis-sold a product.

But there remains a significant gap between the number of people taking their complaints to their bank and those who then go to the Financial Ombudsman Service (FOS) if the issue hasn’t been resolved within the mandatory eight weeks.

More than 150,000 complaints rejected by the banks or not resolved to the customer’s satisfaction were taken to the FOS in the first half of this year. Almost half were upheld in the consumer’s favour (rising to 60 per cent at Lloyds). However the figures suggest that even though there’s a good chance of the FOS finding in favour of consumers, the banks know only too well that if they don’t deal with complaints properly, only a minority will then pursue the issue.

In four in ten cases taken on by the ombudsman in the last year, the company involved had failed to issue any final response – let alone one within the eight weeks required by the regulator – or let the complainant know they could take their grievance to the FOS. While some banks, including Barclays, closed around nine in ten complaints within that time frame, almost a quarter of complaints to Royal Bank of Scotland and Lloyds were unresolved.

In their final responses to complaints businesses are also obliged to include information about a customer’s right to take an unresolved complaint to the FOS. Yet just one in five consumers who went to the FOS last year said they had heard about it from the business they complained to.

Consumer Focus has accused banks of deliberately dragging out complaints and challenging decisions in an attempt to force customers into surrender.

Adam Scorer, director of external affairs at Consumer Focus, said: “If consumers have a genuine grievance with their bank, insurer or any other financial institution they should complain and stick to their guns until they are happy with the outcome.”

There are also concerns about the growing influence of claims management companies, particularly in PPI complaints. The number of cases referred to the FOS from claims handlers jumped sharply to 45 per cent in the year to April, rising to 76 per cent of all PPI complaints.

Yet taking a complaint to the ombudsman is simple and rarely benefits from the input of claims management firms, who often take up to 30 per cent of the compensation payout. The FOS insists consumers don’t need the help of third parties to make complaints.

It said: “We are a free service for consumers, but commercial companies charge consumers to bring a complaint on their behalf … And the outcome of cases shows there is no difference whether consumers bring them to us themselves direct, or pay a claims-management company to complain on their behalf.”

It’s never been easier to make an effective complaint about a financial services provider, so never allow a firm to deter you from taking your case to the FOS. Here are the important steps to take in fighting back:

1 Make contact

The first port of call is the company concerned. Write, call or e-mail, keeping a copy of anything you send, the date, who you dealt with and any other details, such as a complaint number. Keep a note of any correspondence or phone calls throughout the process, including the names of anyone you speak with.

2 Stay calm

You may be angry about the way you’ve been treated, but be courteous, stick to the facts, set out your case logically and resist the temptation to rant. Think about what you want out of your complaint and make it clear. Be assertive but stay in control.

3 Stop the clock

Firms have eight weeks to respond to your complaint. If yours doesn’t do so, contact them with a reminder of their obligations to produce an answer within that time frame.

4 Take it further

If you still don’t get a response or the answer isn’t to your satisfaction, you can now take the matter to the Financial Ombudsman Service (FOS), a free service which mediates in complaints between financial firms and consumers. It handles cases concerning banks, building societies, mortgage firms, insurers, credit card providers, investment houses, financial advisers and pension providers (excepting company pensions).

You have an almost evens chance of the FOS finding in your favour, so it’s worth persisting if you still believe you have a case.

5 Be patient

The FOS can be contacted on 0845 080 1800 or by e-mail [email protected], but make sure the eight weeks has lapsed since you first complained to your bank. Don’t hang around though – if you leave it more than six months after the eight-week deadline expired, it’s too late.

Make sure you send the FOS any material covering your original complaint, including relevant documentation and account or policy numbers. Most FOS cases are dealt with in around three months, although more involved cases can take longer.

6 Consider the outcome

If your complaint isn’t upheld, you have the right to appeal. Alternatively, you could take the legal route, in the form of the small claims procedure in the sheriff court, although the maximum claim in Scotland is just £3,000. See www.scotcourts.gov.uk. Bear in mind that it will cost and that the FOS judgment will be taken into consideration.