Money mensch: Don’t be afraid to take on the banks
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Complain about ISA transfers, bank charges or payment protection insurance and your bank will probably tell you to naff off. Yet do not be discouraged. You can go to the Financial Ombudsman, and it is there that you can expect fair treatment and compensation.
Be under no illusions: financial institutions think in purely commercial terms. Their job is to retain their cash, so when you ask for it, they are going to say no. A recent report revealed some financial firms turned down almost all Payment Protection Insurance complaints, even though when their customers took them to the Ombudsman, every one was awarded in the complainant’s favour. Yet how many rejected customers had the gumption to take it further? For the companies, this strategy of deliberately testing people’s determination and patience is highly profitable.
What is the Financial Ombudsman?
The big difference with the Financial Ombudsman is that it is genuinely there to be impartial and has a duty to ensure customers are treated fairly.
The Financial Ombudsman Service (FOS) is an independent body, established by Parliament in 2001, for settling disputes between UK-based financial companies and their customers and, best of all, it’s completely free.
It has the legal power to adjudicate on individuals’ or small businesses’ complaints. Regulations state that financial companies must “treat customers fairly” and, if not, the FOS is there to provide a way to fight back.
And there is no negative outcome — you cannot be awarded against. The worst that can happen is that the Ombudsman says you have no case.
How does it operate?
The Ombudsman’s primary role is in settling disputes between customers and financial companies. It has the power to carry out investigations but it often solves the problem without the need for one.
The process works like this:
● You fill in a form and it puts your case to the company. It then asks the company what happened and to solve the problem or pay the requested compensation. At this point companies can, and quite commonly do, just agree. It’s simpler than going through a full blown dispute, so if you are lucky they will just roll over and pay out.
● If there is no agreement, the Ombudsman may carry out a formal investigation. It can do this either eight weeks after the initial complaint letter to your bank, or sooner if you have received a final response.
Using the Ombudsman is in many cases cheaper and safer than trying to get resolution via the courts. While you will not get an instant judgment and there is no guarantee you will win, tens of thousands of people every year do.
What can the Ombudsman decide on?
Its range is huge: it covers not just regulated financial activity but also oversees the general operations of a financial company to make sure it is treating you fairly. As well as being a focal point for some of the major issues like bank charges, loan insurance or endowment mis-selling, you can also complain about almost anything to do with bank accounts, credit cards, insurance, pensions, mortgages, loans, savings accounts or investments.
More importantly, unlike the courts which have to rely on whether the company has broken a law, a big advantage of the Ombudsman is that it also follows the regulator’s “treating customers fairly” rules. This means making sure you’ve been dealt with appropriately, not just legally, is crucial.
And if you are not sure, put your complaint in anyway; the worst thing that can happen is the Ombudsman tells you it can’t adjudicate, so you have lost the price of a stamp.
How do I complain to the Financial Ombudsman?
● First, complain directly to the company. You cannot just go to the Ombudsman, it will always want to have seen proof that you tried to settle with the company first.
● You can go to the Ombudsman either if the bank directs you there or you have waited eight weeks. To start your complaint, you just need to contact the Ombudsman and ask it to take on your case either via the FOS website or call 020 7964 0500.
● You will need to fill in and post back a copy of its complaint form to explain your case and so that it has a copy of your signature. Try to make sure the essence of the complaint, and the remedy you want, is stated in the first line.
● Charge the company for the time and hassle it has caused. The Ombudsman can make an allowance of around £50-£100 a day and not more than £10 per hour for the time you have spent trying to put things right. This is official recognition that the time spent to rectify a situation is worth something.
● You can win. It has been estimated that reclaims made through my website alone for all categories of financial injustice could add up to £1bn. This is big money, so it is no surprise you will be in a battle with companies to get it. Yet ultimately we are in the midst of a revolution and the balance of power is shifting. It is no longer perceived that the big institutions are always right, so if you think you have been wronged, sit up, take note and take ’em on.