/ Money

Bank treating you badly? FOS to the rescue!

Man holding shirt open with pound sign on his chest

New figures show the UK’s banks and insurers are still failing to deal adequately with customer complaints. So it’s good to know we’ve all got the Financial Service Ombudsman on our side.

Just as Spiderman serves to protect the people from evil, here in our own little corner of the universe, we’re increasingly turning to the Financial Ombudsman Service (FOS) to protect us from the worst practices of the UK financial services industry.

According to its newly published annual report, the FOS handled over two million enquiries and complaints in the past year. This resulted in a record half-a-million new formal disputes – almost double the previous year’s total.

Not treating customers fairly

These figures demonstrate once more that the UK finance industry is failing to treat its customers fairly. And to rub salt into the wound, companies too often compound this failure by botching the way they deal with legitimate complaints.

While PPI is still the biggest cause for complaint, no area of financial services is immune. From catalogues to pensions, cash machines to life insurance, complaints are rising fast. And these aren’t all small-scale financial providers either. In fact, 62% of FOS cases in the last year related to just four banking groups.

Overall, 49% of the cases dealt with by the FOS resulted in compensation for the customer. That means that almost half of all complainants were ill-served by their financial services provider. If those people hadn’t taken their complaints to the FOS, they might’ve been left out of pocket, or looking to the courts to get redress.

FOS on my side

We hear the odd grumble about how long it takes the FOS to deal with complaints. But faced with two million queries a year, it’s easy to see why it can take a while. Instead, we should be criticising the banks and insurers who cause the problems in the first place. If financial firms held up their hands when they made a mistake and put things right, the FOS wouldn’t have had to deal with a 92% year-on-year increase in its workload.

The new regulator, the Financial Conduct Authority (FCA), has the potential to demonstrate its own super-powers by taking tough action against any bank found dragging its feet when settling complaints. In the meantime, faced with over-powerful financial firms, I for one am glad to have the FOS on my side.

John Campbell says:
14 June 2013

The FOS was no help to me mainly i think because the branch manager ta Santander in AYR. lied to them and it became my word against the cashier. I asked to be told (phoned ) when a cheque i deposited was cleared and the money in my account. The cashier told me that the bank does not do that and went on to say that i should check at an ATM and when it is shown in my account as available then it is cleared. I told her it was payment for a caravan i was selling and that i would be paying out a large amount from the proceeds so needed to know it was there. I had the same conversation with the same cashier when it became available and she confirmed her advice. The cheque bounced and the manager became involved. he said i should have asked for the Special presentation which costs £25 and guarantees the transaction. Exactly what i asked for. I have 2 letters from senior managers at head office saying i should have asked for it and detailing why.
I also have 1 from another manager saying they dont have this service and never have as does the cashier who says she has never even heard of it. The branch manager told the FOS that the cashier said she never told me the cheque was cleared when it became available, he told my solicitor that Santander do not have a Special Presentation then changed his statement back to yes we do for the FOS. With all the conflicting statements from the manager and the cashier confirming to me yesterday 13/06/13 that a cheque is cleared when showing as available and a Santander help section on facebook telling a customer exactly the same as i was told i find it very disappointing that the FOS was so gullible? When the cheque bounced i went around £11,000 into overdraft the bank froze my accounts, stopped paying my standing orders ad put into one hell of a mess which resulted in a bad credit rating. and eventually remortgaging to a high interest only mortgage and to poor to sue but not poor enough to get legal aid.

Ian Eastwood says:
17 June 2013

I am a small business and have an internet banking business account with Lloyds TSB. Due to the changes in the banking sector, my accounts are migrating to the TSB part of the bank as a consequence my internet banking access has been suspended for a week (and remains suspended whilst they are working on the problem). So I am stuck with no access to my account and no ability to check if I have been paid nor any ability to pay anyone. I have not been given a likely date when it will be done just ‘keep logging on and try it’. I do not have telephone banking as I assumed it was unnecessary. So I am left, unable to complete my VAT return and wondering how I am going to pay my few staff if this goes on any longer. Apart from the hours spent trying to get the problem resolved it is difficult to point to any direct financial loss. Frankly it is causing me a lot of stress since I have unpaid bills. Am I the only person who suffers? Why won’t TSB offer me a letter of apology and have someone call me to say the problem has been fixed. Personally I have a banking product that doesn’t work – I pay a fee for this incompetency. Finally, why should my creditors undergo financial hardship because the bank won’t let me pay them until the internet problem is fixed?

JF says:
17 June 2013

Is your account internet only as this would be unusual and I am not understanding why you can’t check your account and/or pay your creditors by going into a branch to carry out the transactions like people used to do before internet banking existed (not that long ago)? I do understand this may not be quite as convenient as internet banking but there are other ways of banking as well as via the internet. Also you say you didn’t have telephone banking as you assumed you would not need it but computers get viruses or fail for other reasons that are not necessarily within the control of the Bank so it’s perhaps slightly unwise to rely too heavily on one method of banking that in reality cannot be guaranteed to be operational 100% of the time, whether this is due to planned maintenance on the part of the Bank, some other unforeseen issue that occurs at the Bank or an issue that is outwith the control of the Bank such as a computer failure or electricity power cut.

Ian Eastwood says:
18 June 2013

Thanks for your comment. It is an internet account so I can probably go to a branch. That is hardly convenient and at the moment I am working silly hours to get stuff out of the door (and I know that spending time complaining now is waste). It is an hour lost getting there and back, and even then there is no certainty that it will work. Why has this not been suggested by the people I call on the phone? Frankly it remains incredibly incompetent that such migration issues were not properly tested and the customer suffers with a product that I pay for each month and which doesn’t work. The point is, that if I were a massive blue chip company you can bet your bottom dollar that this would be fixed in minutes or hours. But a few thousand small customers can go to hell.
Do you think that my expectations are too high?

JF says:
18 June 2013

Hello, I think customers should have high expectations and I can see not being able to access your account by internet is inconvenient which is frustrating especially when you are working long hours. I just think I wouldn’t personally rely on one method of banking as there are always going to be occasions when it doesn’t operate for whatever reason, so in this regard I think your expectations may be slightly higher than the service any company could reasonably be expected to deliver. As a business owner yourself, and from the comments you have posted, you strike me as a person who probably goes out of their way to deliver the highest possible service to your customers, but I’d be surprised if you’ve never had an occasion where, despite your best efforts, something’s happened that has frustrated your genuine desire to deliver the highest standards of service to your customers because in the real world, that is populated by humans, things go wrong from time to time in all businesses including Banks. So that’s why it’s usually a good idea to have a Plan B for bank transactions when the inevitable happens and the internet service goes down for whatever reason. I hope you get online again soon. Best wishes.

Ian Eastwood says:
19 June 2013

Hi JF, I went to the bank today as you suggested, they tried to charge me £30 for each transaction because apparently they can only be done via CHAPS. Fortunately the manager waived the fees after I had explained the situation again and a queue was forming behind me. It is not convenient and slightly embarrassing to stand at a counter discussing payroll. I honestly can’t see how one would do this for 20-30 transactions. So, 9 days on, I am still without internet banking service (which is supposed to have been fixed). I wanted to suggest that I charge them £120 per hour for my time, which including all phone calls would amount to around £360+. As for quality work, if I can’t deliver something to a client or it is going to be late, then I let them know so that they can manage, I don’t ask them to contact me – isn’t that is basic courtesy? The bank is happy enough to contact me when they want to sell me something so it isn’t like they don’t have the staff.

Michael McGhee says:
4 July 2013

I tried to transfer an amount of cash from Santander online banking to another bank current account, as I have done before.
It was blocked. I phoned Santander to ask why and was told the amount was excessive. Even though there was sufficient funds in the account.
When I asked how much I could transfer, I was told that they could not tell me.
I mentioned that this was unacceptable but got nowhere. So, I have an online santander acct but don’t seem to be able to move cash from it.

Ian Eastwood says:
4 July 2013

I want to close my accounts when they do this kind of thing. It is your money you’ve done it before so it isn’t like it is surprise to them and it is probably very embarrassing to you. If they can’t give you a satisfactory answer then I would suggest that you register a formal complaint.