Is it possible to take Hargreaves Lansdown(or any other ISA provider) to court?

Daxm

Hi All,
I had transferred an amount into my ISA by telephone and Hargreaves Lansdown made a mistake upon which I asked them to refund the amount to the same bank account.
They confirmed in writing that the amount was refunded to the same bank account, however it actually went to another of my bank accounts leaving me with a £100 of overdraft charges.

Now HL have one of the worst Customer Service responses if you look online and I wish I had looked before opening this ISA.Never mind anyway now what they are suggesting is that I complain to the FCA.
However the mistake is so obvious that I just feel like taking them to the Small Claims Court instead of the FCA.

However does anyone know if this is possible?

Or does one have to go to the FCA and there isnt any other option?

Plus

Like any company, you are at liberty to sue them. However the court is likely to ask why you didn't go through the usual procedure first. So either you need to come up with a good reason why not, or you go to the Financial Services Ombudsman first. The court is likely to think you're wasting their time since there's an existing process you didn't follow.

One thing to bear in mind is that a case referred to the Ombudsman costs HL about £500 whichever way it goes, so you still inflict some pain on them this way.

economic

Plus wrote: »

Like any company, you are at liberty to sue them. However the court is likely to ask why you didn't go through the usual procedure first. So either you need to come up with a good reason why not, or you go to the Financial Services Ombudsman first. The court is likely to think you're wasting their time since there's an existing process you didn't follow.

One thing to bear in mind is that a case referred to the Ombudsman costs HL about £500 whichever way it goes, so you still inflict some pain on them this way.

thanks for letting me know about the £500. any issues, however minor i experience with banks etc i deal with i will always threaten to go to the ombudesman if they dont pay up a little compensation!

Daxm

Thank you "Plus" that is helpful information.

The reason why I am thinking of going straight to the Court is because their mistake is blindingly obvious,yet they just sidestep it and invite me to complain to the FCA.

I had instructed them to take £3000 out of my Barclays account and then the lady on the phone took £6000 out by mistake.I then emailed them to return all the money back to the Barclays account and then paid for the ISA with my HSBC account.

They then returned the money taken from my Barclays account back to my HSBC account and I got hit with overdraft fees from Barclays for a month!

However Hargreaves Lansdown insist that the money came out of and was returned to the same account despite my showing proof that this was not the case.

If this isn't blind arrogance, then I dont know what is!!

I have now looked up reviews of Hargreaves Lansdown online and now understand what they mean by "arrogant Customer service!"

Wouldnt this be a clear enough reason to approach the Court directly instead of dealing with the FCA as they are suggesting?

Thank you

bigadaj

Daxm wrote: »

Thank you "Plus" that is helpful information.

The reason why I am thinking of going straight to the Court is because their mistake is blindingly obvious,yet they just sidestep it and invite me to complain to the FCA.

I had instructed them to take £3000 out of my Barclays account and then the lady on the phone took £6000 out by mistake.I then emailed them to return all the money back to the Barclays account and then paid for the ISA with my HSBC account.

They then returned the money taken from my Barclays account back to my HSBC account and I got hit with overdraft fees from Barclays for a month!

However Hargreaves Lansdown insist that the money came out of and was returned to the same account despite my showing proof that this was not the case.

If this isn't blind arrogance, then I dont know what is!!

I have now looked up reviews of Hargreaves Lansdown online and now understand what they mean by "arrogant Customer service!"

Wouldnt this be a clear enough reason to approach the Court directly instead of dealing with the FCA as they are suggesting?

Thank you

It would,be a pretty daft move to go to the court without using the ombudsman, as stated above teh threat of going to the fos for a non flippant complaint usually means the provider prefers to pay a smallish amount of compensation rather than getting charged for teh investigation. There's also the bad publicity and record of formal complaint for them to consider.

Why are you so,obsessed with court action, it's probably a harder fight and more time consuming, what do you actually want and expect from them? Is it the overdraft charges refunded and a small sum for wasted time and hassle, or are you expecting a significant windfall?

You'll presumably be moving accounts after this in any case, the only reason for using them and their inflated costs is typically cited to be the good customer service so many other brokers will be far cheaper.

bowlhead99

Daxm wrote: »

Now HL have one of the worst Customer Service responses if you look online and I wish I had looked before opening this ISA.

Among their rival 'direct to customer' investment platforms their reputation for CS is actually quite good. They have pretty much the highest fees of all percentage-based service providers and yet retain £70bn under administration and around 0.9 million clients, due in part to a reputation for high customer service levels. Calls answered within a few seconds etc. When they have more customers than anyone else you would of course expect to find some complaints online - but even if they have the highest absolute number of complaints that does not imply worse service levels - you would expect more complaints if they have more customers in the first place and identical service levels to everyone.

Never mind anyway now what they are suggesting is that I complain to the FCA.

I expect what they are suggesting is that after you have exhausted their own complaints procedure you take it to the FOS (financial ombudsman service), as FCA don't review individual complaints.

However the mistake is so obvious that I just feel like taking them to the Small Claims Court instead of the FCA.

However does anyone know if this is possible?

Or does one have to go to the FCA and there isnt any other option?

Anybody can sue anyone else for anything if they are willing to pay for it. Courts don't like frivolous or vexatious lawsuits though.

Daxm wrote: »

The reason why I am thinking of going straight to the Court is because their mistake is blindingly obvious,yet they just sidestep it and invite me to complain to the FCA.

The FOS?

I had instructed them to take £3000 out of my Barclays account and then the lady on the phone took £6000 out by mistake.I then emailed them to return all the money back to the Barclays account and then paid for the ISA with my HSBC account.

They then returned the money taken from my Barclays account back to my HSBC account and I got hit with overdraft fees from Barclays for a month!

Clearly, it was their mistake if they took £6000 when you instructed them to take only £3000 and you would hope they would return the excess quickly and compensate you for consequential losses which came from that initial carelessness whereby you had paid £6k out of an account from where you only wanted to pay out £3k from that account. If they do not give your your money back to fix the problem of you being £3k overdrawn ASAP, you would expect some compensation, increasing the longer they don't fix it.

Then, after you had double/triple funded your ISA you asked them by email to return the excess money and they returned the excess to the last account from which you contributed to the ISA, which is relatively normal among investment firms.

However Hargreaves Lansdown insist that the money came out of and was returned to the same account despite my showing proof that this was not the case.

How much did you put in manually from your HSBC? It sounds like at least some of the excess that you didn't want to have invested in the ISA was 'returned to the same account' it had been paid in from, because you most recently funded from HSBC and they refunded to HSBC following their policy to return funds to the account from which it had been contributed.

If this isn't blind arrogance, then I dont know what is!!

I have now looked up reviews of Hargreaves Lansdown online and now understand what they mean by "arrogant Customer service!"

Wouldnt this be a clear enough reason to approach the Court directly instead of dealing with the FCA as they are suggesting?

When you have calmed down, have a look at the terms and conditions of your account. If there is a specific term that says they shall not be arrogant in the provision of services, you could say they have broken that contractual term, and sue them for breach of contract. However, I suspect 'service provider must not display blind arrogance' or 'HL must not provide arrogant customer service' are not contractual terms and so would not in themselves be 'clear enough reasons' to sue. You would instead be better looking at what damage or inconvenience they actually caused you.

Saying that they do not consider themselves to be in the wrong and recommending a free dispute resolution service is not abhorrent and arrogant. It is quite normal. The real question is whether they did actually cause you some damage in the first place, and how much.

There is a defined process for the financial services industry whereby the ombudsman, funded by levies on all firms, will arbitrate complaints which have reached the end of the firms' complaint process, in an attempt to deliver a fair resolution. That service is completely free to the customer and results in a case fee (of about five times your overdraft fees) being charged to the firm whether or not your complaint is upheld, on top of any compensation recommended.

When you go to court to say you have been wronged, the court will ask what resolutions the firm had offered and why you didn't use the free service where an expert in financial services complaints would have been able to arbitrate the complaint rather than taking the court's time. Court would of course still be an option after getting an FOS ruling.

As an aside, in terms of the amount of fees you incurred: You mention you 'got hit with overdraft fees for a month' and that the overdraft fees were £100. Their action to draw £6000 out of the Barclays account (by direct debit? by debit card?) when you had only requested £3000 be taken, could clearly cause some problem. You were concerned that too much had been taken and that the Barclays account had too little money in it and needed a large refund ASAP.

Surely if they refunded the money to the 'wrong place' then it would have been pretty immediately obvious that you had an overdraft problem because Barclays balance was £3k or £6k too low having not received the refund you were eagerly awaiting while HSBC was £3k or £6k too high. So, if the overdraft endured for a whole month, one might expect some of that problem to be of your own making - for not moving money between your accounts to fix your overdraft problem after you could see that the refund had been made to a different account.

That's not to say there was no problem with them taking £6000 out by debit card or direct debit (or some other method?) over the phone when you had instructed only £3000 over the phone, because of course there was. But if you incurred overdraft fees from Barclays for a month perhaps some of that fee is a bit long after the original event to be blaming them for it exclusively, if they had already sent you money to cover it (albeit to a different current account of yours).

Hargreaves_Lansdown_representative

I'm sorry you have had this experience. I'd like to be able to investigate what has happened, please can you e mail using the contact us part of our website. They will pass the message onto me and I will come back to you.

dunstonh

You can take anyone to court but the court/judge would want you to treat it as a last resort. You could also lose and suffer costs.

Now HL have one of the worst Customer Service responses if you look online and I wish I had looked before opening this ISA.Never mind anyway now what they are suggesting is that I complain to the FCA.

HL have faults, like all companies, but their customer service has a good reputation. Looking at online review sites is rarely a good way to get a balanced opinion.

The FCA do not handle consumer complaints. If you contacted the FCA, they would just forward your complaint to the company.

However the mistake is so obvious that I just feel like taking them to the Small Claims Court instead of the FCA.

A mistake where you have suffered no financial loss could easily be considered frivolous and pointless.

One thing to bear in mind is that a case referred to the Ombudsman costs HL about £500 whichever way it goes, so you still inflict some pain on them this way.

The FOS can class a complaint as frivolous and the FOS would not be applied.

Wouldnt this be a clear enough reason to approach the Court directly instead of dealing with the FCA as they are suggesting?

No. I would expect a judge to throw it out in the pre-court checking.

The simplest option is to register a complaint with HL and let that follow through. HL will handle the complaint competently and check their audit trails to see if what you say is correct and then decide an outcome based on that.

Plus

bowlhead99 wrote: »

Among their rival 'direct to customer' investment platforms their reputation for CS is actually quite good. They have pretty much the highest fees of all percentage-based service providers and yet retain £70bn under administration and around 0.9 million clients, due in part to a reputation for high customer service levels. Calls answered within a few seconds etc. When they have more customers than anyone else you would of course expect to find some complaints online - but even if they have the highest absolute number of complaints that does not imply worse service levels - you would expect more complaints if they have more customers in the first place and identical service levels to everyone.

That may be true, but they have a tendency to clam up at a given point. When they announced their post-RDR pricing, people were writing to them saying they wanted to leave because their fees had doubled and HL were sticking to their guns about charging transfer out fees. They did have to be pushed quite far by people taking cases to the Ombudsman before they eventually relented -- but you only got your fees waived if you wrote an letter marked 'official complaint', quite clear that the Ombudsman was next. People who didn't know this formula didn't get anywhere.

jimjames

How did money go to another bank account if HL knew nothing about it? HL generally have the reputation as having one of the highest service levels which is a justification for the higher fees.

bryanb

Daxm wrote: »

I had instructed them to take £3000 out of my Barclays account and then the lady on the phone took £6000 out by mistake.I then emailed them to return all the money back to the Barclays account and then paid for the ISA with my HSBC account.

Why didn't you just instruct HL to return the excess amount? No problem/No Paying twice/ No overdraft charges/No need for complaint.