Don't put up with poor customer service
It takes time to build trust with someone. Yet trust is part of the foundation of a good and strong relationship whether it is with your partner, a friend, your work colleagues or a financial institution.
But while it takes time to build up trust, a single mishap could easily wreck it. Most people are likely to wish to rebuild that trust with someone they know, but few would think twice about heading for pastures new once they’ve lost faith in their financial services provider.
You might expect financial institutions to use this knowledge to their advantage to hold onto their customers, but despite this, most of us have had at least one bad experience with our bank, insurer or mortgage lender. And the Moneywise team has not managed to escape sub-standard service.
Earlier this year I was disappointed to find out that I had to use my “I’m a financial journalist” line to finally settle something as straightforward as a mobile phone insurance claim.
I decided to go for Barclays’s Additions Active account (£14 per month) in October last year after purchasing an iPhone. While I’ve heard lots of bad things about packaged accounts, the customer services assistant I spoke to at Barclays was very convincing about its benefits. I would not only be getting a lower interest rate on my overdraft, but it would also offer a car breakdown service, mobile phone insurance and travel insurance among other benefits.
Although I haven’t got a car, I thought the mobile phone insurance and the travel insurance were valuable benefits to have. However, when my iPhone broke down early this year I quickly found out that the mobile phone insurance that came as part of the Additions Active account was less than adequate.
Not only did it take the insurance company over a month to ‘fix’ my phone, but when I got it back it was still broken.
To add insult to injury, when I phoned it up to complain, the person I spoke to calmly told me that they needed to assess whether I had managed to break the phone again after I got it back, despite the fact that I had only just received it – and that I might have to pay £50, the excess payable for making another claim.
The matter was not resolved until I contacted Barclays’s press office, and within a minute or so, the insurance firm called me back and said it was going to post me a cheque for the full amount of a new iPhone. Now, despite my claim eventually being resolved, I’ve lost faith in Barclays and would not recommend it to anyone I know.
Lucy Heaney, the sub-editor at our sister publication Money Observer, has also had her fair share of bad customer service. When Lucy was unemployed back in 2004, Lloyds TSB persuaded her to take out a £12,000 loan to pay off her overdraft, credit card debt and another loan she had with the bank. The deal was that the new loan repayments would only start after six months.
“However, the bank started taking the money for the £12,000 loan out of my account after four months and I only found out when I went over my limit. The two loans with Lloyds had not been consolidated either as initially promised,” says Lucy.
Fight for your rights
Lucy decided to fight for her rights. She says: “I decided that I wasn’t going to accept this, and I don’t think any consumer should accept this treatment.”
After a five-month battle with Lloyds TSB, Lucy finally managed to reach an out-of-court agreement where just the actual loan amount was paid off and the 16.5% plus interest on the loan was scrapped.
The bank agreed that Lucy had been mis-sold the loan, and that the account manager should not have sold any sort of loan to someone who was, at the time, unemployed.
But while she still banks with Lloyds TSB, and has had no further problems with it since, she says she wouldn’t recommend the bank to anyone: “If you are looking for a new product I wouldn’t advise going to Lloyds TSB.”
Unfortunately our stories are just two of many – with distrust in the financial sector rife. The fact is that following the financial crisis, consumer trust in financial services across the UK has effectively halved over the past 12 months. So what can companies do to rebuild that trust and make sure customers receive the service they deserve?
Trust can be created in two ways. One is through a series of small events: for example, withdrawing money from your account without hassle, or being treated courteously at your local branch. Each time this happens without disruption or incident, our trust grows in the financial institution. Trust can also be created through positive responses to major events in the life of a customer, like, for example, having an insurance claim sorted straightaway.
But how can we, as costumers, find out which companies will work on building trusting relationships?
To help you identify which companies you can have faith in, Moneywise decided to conduct some extensive research to discover the companies you think make the most effort to treat customers fairly, offer the highest level of service and provide the best value for money.
We received over 10,000 responses, making this the UK’s largest dedicated survey of customer service performance among financial companies.
And now we can finally reveal the winners and the runners-up for these prestigious awards.
We hope this will help you choose brands you feel confident you can rely on – and recognise the ones to steer clear of.
We aim to provide the less ‘successful’ companies with something to strive for, and hopefully to kickstart an improvement in customer services across the board and greater consumer satisfaction all round.
A current account that charges a monthly fee in return for a “package” of additional services, such as travel insurance, credit card protection, mobile phone insurance, identity theft insurance, car breakdown cover or a “concierge service” that will book airline and theatre tickets or restaurant tables. However, many consumer experts say the features are overpriced and that more competitive deals exist elsewhere in the market and that very few packaged account holders actually take advantage of the features.
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.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.