How to complain: The Moneywise 10-step guide
In an ideal world, we would buy a product and experience no problems whatsoever, whether that's a washing machine or an investment fund. The reality, sadly, is often somewhat different.
There were more than two million enquiries and complaints from consumers about financial products in the year 2012/13, according to the Financial Ombudsman Service (FOS). That's 7,000 complaints for every working day of the year.
Unsurprisingly, payment protection insurance (PPI) made up 74% of all cases, with 378,699 PPI complaints last year alone - more than double the previous year.
"We have seen a much stronger consumer voice in the last year - with people becoming more aware of their rights and less willing to put up with poor customer service," says Natalie Ceeney, chief ombudsman.
"As levels of confidence in financial services have eroded, it is disappointing that we still haven't seen any significant improvement in complaints handling. Too many financial businesses still seem unable to sort out problems without the ombudsman having to get involved."
The figures are startling: 16% of people in the UK said they'd had a problem with a financial product or service; while four of the UK's largest banking groups accounted for 62% of all complaints the FOS received.
But complaints do not always have to reach an ombudsman and there are several steps you should take before you escalate your problem. Here's our step- by-step guide to complaining.
1. COMPLAIN TO THE COMPANY INVOLVED
You should give the company the chance to resolve your problem first - the ombudsman will not consider a complaint until you have done this anyway. Try to contact the person you originally dealt with and, if they can't help, ask for details of the official complaints procedure and the name of the person who will be handling your complaint.
2. PUT IT IN WRITING
Explain exactly what the nature of your complaint is and what you would like the company to do about it.
The ombudsman says you should write 'complaint' at the top of your letter, and make sure you include important details such as your customer number or your policy or account number. Keep things brief and to the point: set out the facts clearly and in a logical order. Say why you're not happy and what you want the business to do about it.
This will make it easier for it to look into the problem and sort things out.
3. GET HELP IF YOU NEED IT
If you're unsure exactly what to put in your letter, you can contact the ombudsman for support - it will contact the business for you, and tell the firm about your complaint (though it won't consider your case until the company has considered it first). Alternatively, you could ask a friend, carer, family member or an organisation such as Citizens Advice to help you.
If you have to make a complaint by phone, ask for the name of the person you speak to and their job title, and don't forget to make a note of this, the date and time of your call, and what was said.
4. DON'T GET ANGRY
Try to stay calm and polite, however angry or upset you are - whether you're scrawling your complaint in writing or making a verbal complaint on the phone. It will help you to explain your complaint as clearly and effectively as possible. You are also more likely to be taken seriously and have a better chance of your complaint being dealt with quickly and sensitively.
5. BACK UP YOUR CASE
Send copies of any relevant paperwork that you believe backs up your case. Keep a copy of any letters between you and the business - you may need to refer to them later.
6. BE PATIENT
Don't expect immediate results - some complaints may take time to investigate properly and resolve. By law, the business you are complaining about has up to eight weeks to sort out the complaint itself before the ombudsman service can formally get involved.
7. DO IT YOURSELF
You do not need to contact any specialist organisations to complain on your behalf. By law, businesses covered by the ombudsman have to handle complaints according to rules set out by the regulator, so you shouldn't need any special help when you complain.
8. NEVER PAY TO COMPLAIN
The ombudsman service is free. It decides if your complaint is valid by looking at the facts of the case - not at how well you present your complaint. Moreover, the ombudsman says it actually prefers to "hear from you in your own words", so never pay a third party (such as a lawyer or claims management company) to do it on your behalf.
"Experience shows no difference in the outcome of complaints - whether consumers bring them to us themselves or use a claims management company to complain on their behalf," a spokesman for the ombudsman service adds.
If you do employ someone to present your case, you'll pay for the privilege, probably from any compensation you might be awarded.
Since April 2007, 'no win, no fee' claims management firms have been authorised by the Ministry of Justice (MoJ). If you do go down this route, check on the MoJ website that the business concerned is legally able to handle a complaint on your behalf.
9. AWAIT A DECISION
Some complaints take just a few months; others can take a year or more. Once the ombudsman has made its decision, it will write to both you and the firm involved with its findings. Usually, both sides accept this.
If you don't accept what it says about your complaint at this stage, then you (or the business) can ask to have the case reviewed. When that has happened, you'll have to accept that the ombudsman's decision is final, though you are free to take your dispute to a court.
10. GOOD LUCK!
In 2012/13, the ombudsman's involvement resulted in compensation for consumers in 49% of cases. If it upholds a complaint, it can tell the financial provider to compensate you for losses of up to £150,000.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
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.