Financial complaints soar
The number of complaints about financial services increased significantly during the second half of 2009 due to the amount of backdated complaints related to unauthorised overdraft charges.
Financial firms received a total of 2.6 million complaints during the second half of 2009, according to the Financial Services Authority (FSA).
Firms regulated by the FSA, such as banks and mortgage lenders, are required to report to the regulator every six months with the number of complaints they receive, how they’ve been handled and the redress paid.
The latest data for the second half of 2009 shows a significant increase compared with the first half of 2009.
This, the FSA says, is because the figures include two years’ worth of backdated complaints related to the unauthorised overdraft charges test case.
The complaints were put on hold with an FSA waiver for the duration of the test case between the Office of Fair Trading and major banks, which ended last December. Banks now have to deal with these complaints, which accounts= for most of the increase in complaints during this period.
Complaints about banks and building societies totalled 2,225,458 during the second half of 2009 with the number of complaints about terms and disputed charges coming to 1,572,133. The total amount of redress paid by firms was £284 million with the largest amount of redress by product for general insurance and protection (£144 million).
How to make a complaint:
In the first instance, contact the bank or financial firm concerned and tell them what the problem is. Make sure any letters you write are clearly labelled 'complaint' and make a note of the name of everyone you speak to.
Each financial firm will have their own internal complaints procedure they must follow but they have eight weeks to resolve your complaint. However, they should acknowledge your complaint much earlier than this.
When speaking to the company or writing a letter of complaint, stay calm. Make sure you know what you want to say and do so in a clear, polite manner. Be clear about what you want done do to rectify the situation such as offer compensation.
If your complaint hasn’t been resolved in eight weeks, or you don’t agree with the firm’s decision, you can take your case to the Financial Ombudsman Service. It’s free and will look at your case independently.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.