Ombudsman: "banks must be more sensitive to old age"

20 August 2013

The Financial Ombudsman Service (FOS) has reported that 24% of all complaints it received over the past year were from people aged 65 or over.

Of those complaints, 22% were about payment protection insurance, 16% were related to investments and pensions, 15% about current and savings accounts, 7% to do with mortgages and 4% about motor insurance.

Over the past three years, the FOS said it has seen a 249% increase in the number of complaints from over-65s.

Charity Age UK has also reported receiving increasing numbers of enquiries from over-65s who are struggling to access quality financial services that suit their needs.

The charity and the FOS are now calling on financial services companies to be more sensitive to age when considering applications for products such as mortgages and investments.

To highlight some of the difficulties over-65s have encountered, the FOS has published some of the age-related complaints it has dealt with.

Inappropriate advice

In one case, a couple both aged 73 sought advice from their bank about investment options. Mr and Mrs W were advised to invest £40,000 in a capital guaranteed multi-index equity bond deposit plan, which they did.

They were obliged to keep it for six years to retain the capital guarantee but Mr W died 15 months after the couple had taken it out. Mrs W then asked to cancel the plan and when the bank refused, she complained. As her husband had clearly been in poor health when they had taken out the plan – he was a wheelchair user and had already exceeded his life expectancy by four years – Mrs W said such a long-term investment could not have been right for them.

The bank did not agree and pointed out to Mrs W that the adviser had recorded their health as "good" during the fact-find that he had gone through with them.

When the FOS looked into the case, it found that despite the bank’s records showing it knew the couple to be inexperienced investors, it failed to seek enough information about their age-related and health issues and said it was "unlikely" the couple would have confirmed they were both in good health to the adviser.

The FOS upheld Mrs W’s complaint and found the bank to have given inappropriate advice. It ordered the bank to put her back in the financial position she would have been in if she and her husband had left the money where it was in the first place.

Other complaints upheld included a case in which a consumer insisted her elderly father was pressured into taking out an on-the-spot loan to buy a boiler from his energy provider, which had sent a sales representative to his home. This was despite the fact he was in his eighties, had a visible tremor and had a medical condition that made him often confused.

The FOS said the salesperson should have been able to identify the gentleman’s difficulties and been sensitive to the situation. The energy provider was made to reimburse their customer and give him £150 for the distress and inconvenience caused.

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