How to get your financial complaint heard
Staying on top of your financial affairs is challenging enough even when all's well but when things go wrong - through no fault of your own - it can be hard to know where to turn. All too often, the customer is made to feel like David in an ongoing battle with Goliath.
But that needn't be the case if you follow these simple tips:
1. Go direct
Complain directly to the company in the first instance, either by phone or in person. It's much faster than waiting for a letter to be delivered and responded to - we regularly hear from readers left frustrated because their letters have gone unanswered.
So while it may be necessary to detail your complaint in writing at a later date, try to speak to a customer service adviser first. If you need to call, you should be able to find the right phone number on any recent correspondence from the company or you can search for the customer services phone number online.
Unfortunately, some financial service companies are still using expensive premium-rate phone numbers for complaints and helplines. Some have already ditched them – including RBS, Barclays and TSB – but the regulator is looking into getting the rest to follow suit soon.
If the number you need does turn out to be a premium-rate line – starting 0844, 0845, 0870 or 0871 – use saynoto0870.com to find a local-rate alternative. If not, remember it's usually cheaper to call a premium- rate number from a landline, so don't be tempted to use your mobile.
2. Keep calm
Stay calm and polite and try to explain your problem clearly and succinctly – resisting the temptation to air your frustrations and go into great detail.
3. Be clear and concise
Don't go into too much detail straightaway. Of course, you'll need to supply information about your account and the products or service you're complaining about but you'll be asked for additional information should it be necessary at a later time. Check your spelling and grammar – you'll be taken more seriously.
4. Gather evidence
To make your case as strong as possible, get together any proof of your claim.
Whether that's a copy of a bank statement which shows a charge made in error or photos of damage relating to an insurance claim - scan them too as electronic documents can be sent quicker. Also keep a record of all your correspondence, along with the names and job titles of the people you speak to.
5. Suggest an outcome
It's a good idea to include a suggestion of how you would like the company to resolve your complaint. So think carefully and realistically about the action you would like it to take. This will again help the person dealing with your complaint to formulate an action plan and deal with you more quickly.
6. Be patient
Once you have made initial contact, the company has up to eight weeks to try to resolve your problem. By all means, call or email to check progress as often as you deem appropriate but remember how long a company actually has to respond.
7. Don't forget the power of social media
Most big financial services firms are on Facebook and Twitter in a bid to boost their public persona. Lots have customer service representatives on the lookout for complaints being aired publicly. So if you've struggled to get hold of the company over the phone, give it a go but never reveal personal details such as your account or reference numbers in a public message.
8. Approach the ombudsman
If the company fails to respond to you in a satisfactory manner, you can refer your complaint to the impartial and independent Financial Ombudsman Service (FOS). You can only do this once you've exhausted communication with the company.
You have six years from when the problem first occurred to bring a complaint to the FOS – or three years from when you realised you had cause to make a complaint. And if the company missed its eight-week deadline to look into your complaint, then you have six months to take it to the ombudsman.
It's free and easy and you don't need any special help (from a claims management company). Visit financial-ombudsman.org.uk/consumer/complaints to download a form. If you want to discuss your complaint before submitting your form, call the FOS on 0300 123 9 123 or 0800 023 4567.
There is a separate form for personal protection insurance (PPI) complaints but both forms need to
be completed by hand and returned by post, with any supporting evidence, to Financial Ombudsman Service, South Quay Plaza,183 Marsh Wall, London E14 9SR.
It will investigate your complaint, looking at both sides of the story and weighing up all the facts. If it decides the company has acted wrongly, it will see that matters are put right - and can award compensation.
9. The complaints procedure for complaining about insurance is the same as above.
If you bought your policy through a broker, complain to them first. If not, go straight to the company by phone. If you're not happy with the response, write a formal complaint letter, including your policy number.
If you are complaining about PPI, which was widely mis-sold, you have to contact the bank or credit card provider that sold it to you in the first instance - most have dedicated PPI teams to help deal with your claim. It's easy to make a complaint and claim for compensation yourself. You can download a template letter and fill in your details at moneywise.co.uk/files/PPI_LETTER. Don't use a claims management company.
What the FOS can't help you with
The Financial Ombudsman Service (FOS) can only look into complaints about companies that are regulated by the Financial Conduct Authority (FCA). For example, it can help with complaints regarding peer-to-peer lenders because they are now regulated by the FCA. But there is a difference between FCA regulation and the savings safety guarantee offered by the Financial Services Compensation Scheme (FSCS), which promises to pay £85,000 per person, per financial institution if a provider goes bust.
Peer-to-peer lenders are not covered by the FSCS, so if a provider enters into bankruptcy, you'll get nothing, even though it's regulated.
Neither are customers entitled to recompense should their investments in peer-to-peer loans turn bad (unless they can prove they weren't made aware of the risks); though some of the biggest companies have specialist funds that can cover losses in some circumstances.
Even when dealing with regulated firms, if an investment performs badly, there's nothing the FOS can do unless the investment firm or your adviser can be proved to have acted negligently or dishonestly. Stockmarket investment is inherently risky.
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.
The Financial Services Compensation Scheme is the compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading, the FSCS may be able to pay compensation to its customers. Limits apply to how much compensation the FSCS is able to pay, and those limits vary between different types of financial products. However, to qualify for compensation, the firm you were dealing with must be authorised by the Financial Services Authority (FSA).
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.
A person (or business) unable to pay the debts it owes creditors can either volunteer or be forced into bankruptcy – a legal proceeding where an insolvent person can be relieved of their financial obligations – but loses control over their bank accounts. Bankruptcy is not a soft option. Although it may wipe the financial slate clean, it is extremely harmful to a person’s credit rating (it will stay on your credit record for six years) and will adversely affect your future dealings with financial institutions. Bankruptcy costs £600 paid upfront.
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.