"Banks want charge for going to the Ombudsman? P*** off" blog discussion

~Brock~

JimmyTheWig wrote: »

I'm glad you went on to say

as you are one of the most regulated people in the country!

.....but without any redress mechanisms.

JimmyTheWig

~Brock~ wrote: »

.....but without any redress mechanisms.

Maybe no official channels. But does official regulation always work? Does it always work quickly enough?
I would argue that the size of the MSE community far outguns any official regulation that could be put in place.

RmG_2

I'm not to sure if there's a trick being missed here. If a small charge is levied in exchange for a greater correction. Cases that are found to be in favour of the consumer should have more of a sting. I’m not advocating huge sums paid out to consumers, but certainly to finance a monthly advertising spree on which institutions is responsible for what and how many cases.

"ombudsman-complaints-data.org.uk" ...just doesn’t have the punch.

If the objective is to correct the Banks lacklustre procedures, make it more expensive for them to be found wrong, and even more expensive to be found wrong and tardy.

bobprice101

Hi,

I did some of my own research about the Financial Ombudsman Service (FOS) a few months ago as in my experience the FOS is not as impartial as it suggests itself to be. I began freelance writing as a result and published my findings at Suite101 the title of my article is aptly named 'The UK Financial Ombudsman Service'.

Our initial complaint was against Lloyds, but it soon becamse obvious that the FOS instead of being impartial actually ignored elements of our complaint in order to dilute it. They instructed me to make a second complaint about Financial hardships and when I did, the FOS stated that they would not review elements referring to our first complaint, even though they were fundamental to both.

Basically what they did was divide our complaint and conquered it simply by ignoring issues relevant to both and, importantly even though had been the ones that told me this was the way to do things!

I've written about this treatment to Mervyn King at the Bank of England, the Treasury, the Financial Services Authority and Nick Clegg. All state that the FOS is an independent body and that none of them can have anything to do with any decision they may make. Yet, our initial complaints against Lloyds were genuine and easy to understand.

The FOS states that you can always take your complaint to court, but courts won't hear your case until it's been in front of the FOS. Additionally because we're short of cash taking this to court was not even an alternative.

Now we hear that the FOS should be paid by victims of banks. Having to pay for the FOS to waste my time over the period of a year would have been like paying out for something that was never going to be given - justice.

tealady

More power to your pointy head Martin. I have learned more about finance from this site than from any other resource in my life. It was only by being bored on a train and reading an abandoned newspaper that I found your site, my Guardian angel was watching over me that day!

AndyinLondon_2

I'm a long time lurker but I've signed up to comment on this thread. I will declare my interest first, I work for a small firm and as part of my role deal with FOS complaints. I won't identify my employer and these are my own views. I have deliberately made details vague to protect my anonymity.

I do not think FOS should charge a fee to the customer, but I also don't think the banks should always have to pay the £500 case fee.

As an example, we had a customer who was declined for a product. He phoned our contact centre and told the agent that he was going to go to stab a member of our staff unless he got his product. This was reported to the police, who arrested him. We closed all his accounts. He complained about this and it ended up with FOS. We were charged a £500 case fee, even though we obviously won. Is that right?

Perhaps a better system would only be to charge the banks a fee when they lose the case. If the bank wins, nobody pays. Obviously the fee would have to increase but it would mean only banks who were treating customers badly would pay.

The fact that the Ombudsman cannot do anything on a wider scale, on a group scale, it can only be reactive and not proactive, I think is one of the problems in the current system.

Agree, strongly. A starting point would be for the Ombudsman to actually publish more of their decisions. My older colleagues tell me they used to do this, but now Ombudsman News contains very few case studies, and it covers such a broad spectrum of Financial Services that half of those they do publish are irrelevant to the majority of readers. Perhaps they could ditch the interviews with members of their staff (I really don't care if the chief adjudicator likes rock music and garlic mushrooms!) and include more detailed case studies.

In my little firm, we had a case recently where something had gone wrong and caused a financial loss to a customer, who complained. We agreed compensation which he accepted. We then carried out a review of our records and found that twenty three other customers had been affected by the same thing, but hadn't complained. I have written to those twenty three people telling them we have found an error, and that we will compensate them. FOS should have the power to force firms to do this - not just compensate Mr X but also take realistic steps to identify if Mrs Y and Dr Z are likely to be in the same position and compensate them too.

It's a massive task but the situation should be that it's cheaper to do it right for everybody, than to do it wrong for most people and pay compensation to the odd person who complains.

Alpine_Star

akrot1 wrote: »

What do people think is going to be the next mis-selling scandal? WE've had pension review, endowment mortgages, bank charges and PPI - what's next?!?!?

In my view it could be identity theft insurance http://www.bbc.co.uk/news/business-11747016

Major banks have engineered a situation whereby the telephone number they give you to verify your new credit card is actually that of an insurance company that mis-sells you identity protection.

The credit card provider gets a commission on every policy 'sold', escapes liability for the mis-selling thus avoiding any subsequent FOS complaint fee.

JimmyTheWig

AndyinLondon wrote: »

Perhaps a better system would only be to charge the banks a fee when they lose the case. If the bank wins, nobody pays. Obviously the fee would have to increase but it would mean only banks who were treating customers badly would pay.

I think this is a great idea. In fact, the whole post was good.

What do you think, Martin? Do you think it would work? Would be more incentive for the banks to not cause trivial complaints...

Mr_Meggo

akrot1 wrote: »

What do people think is going to be the next mis-selling scandal? WE've had pension review, endowment mortgages, bank charges and PPI - what's next?!?!?

I believe that undoubtedly the next big misselling scandal will be second secured loans. There are already millions struggling with repayments as the interest rates on these have not been reduced as has happened with main mortages. In many cases rates have been increased while base rates have fallen. No doubt there will be massive increases when rates start to rise, people will start defaulting in droves and we'll have a homelessness crisis of which we haven't seen the likes of before. However, the Regulators will do nothing about it for fear of offending or damaging the banks responsible for this misselling debacle.

vikingaero

If the FOS charges consumers a fee, even a nominal one, then if the offending company lose they should pay a punitive fee and compensation. You can't have things both ways. A punitive fee would be the only way to stop these mongrels from re-offending. So if the FOS charge the consumer £50 for making the complaint and the complaint is upheld, then I'd argue that a fair charge to the offending company would be:

(1) First offence of this type - £5,000 + compensation
(2) Second offence of this type - £50,000 + compo
(3) Third offence of this type - £500,000 + compo
(4) Fourth and subsequent offence of this type - jail for directors, non-negotiable fine of 10% of turnover, + unlimited compo.

You really need to stop hundreds of consumers from bringing the same complaint for the same company and clogging up FOS resources. But as I am spouting common sense my suggestions are unrealistic.