Are Banks too Quick to Refer to the Ombudsman's Office?

Cotta

Hi All,

I spoke to a work colleague today who was awarded £150 for the loss of access to his Nationwide current account some months ago. He mentioned it to the bank at the time, they conceded there was on error on their side but felt that "lack of access to the account for five days did not warrant any compensation, a contrary view by the customer would need to be taken to the Ombudsman". My work colleague felt that a solution directly with the bank would have been painless and he would have accepted a much lower offer but Nationwide would not hear of it.

I also had a recent example of something with TSB, however they have more serious internal issues and didn't even respond to my complaints.

Is the Ombudsman an easy option for banks at times or do they generally get it right?

JuicyJesus

They literally have to. The FCA brought in rules saying that they must (where practicable) offer a one stage complaints process, and anything where the customer disagrees (or indeed, any complaint where they've issued a final response) must be offered the option of going to FOS.

https://www.fca.org.uk/publication/consultation/cp11_10.pdf

Previously there was a perception (and in all fairness, not a particularly unjustified one) that banks lowballed/poorly handled initial complaints, only to then move on to a second "escalated" internal stage if the customer was unhappy, at which point they'd issue a final response and the customer could then go to FOS if they remained unhappy. This has since been abolished so that the first response the customer gets is the final response with FOS rights; this means that banks are encouraged to get the resolution right the first time, without (being seen to be) trying to fob people off.

So in short; a firm must issue a final response as its first (and only - it's not final if they then revise it!) response, and all final responses must confer FOS rights. So this is normal and as intended by regulation. It doesn't make banks' complaints handling perfect as you're well aware, but it is (arguably) an improvement over what we had before.

Cotta

JuicyJesus wrote: »

They literally have to. The FCA brought in rules saying that they must (where practicable) offer a one stage complaints process, and anything where the customer disagrees (or indeed, any complaint where they've issued a final response) must be offered the option of going to FOS.

https://www.fca.org.uk/publication/consultation/cp11_10.pdf

Previously there was a perception (and in all fairness, not a particularly unjustified one) that banks lowballed/poorly handled initial complaints, only to then move on to a second "escalated" internal stage if the customer was unhappy, at which point they'd issue a final response and the customer could then go to FOS if they remained unhappy. This has since been abolished so that the first response the customer gets is the final response with FOS rights; this means that banks are encouraged to get the resolution right the first time, without (being seen to be) trying to fob people off.

So in short; a firm must issue a final response as its first (and only - it's not final if they then revise it!) response, and all final responses must confer FOS rights. So this is normal and as intended by regulation. It doesn't make banks' complaints handling perfect as you're well aware, but it is (arguably) an improvement over what we had before.

Fair points but I was referring more to the fact that sometimes banks were referring cases to the Ombudsman that they could have easily resolved internally.

In relation to the stage process, I know this still goes on with Bank of Ireland as I have a mortgage complaint that went to stage three very recently before I could ask an Ombudsman to look at it.

JuicyJesus

Cotta wrote: »

Fair points but I was referring more to the fact that sometimes banks were referring cases to the Ombudsman that they could have easily resolved internally.

Yeah, most likely - that is in no small part why the Ombudsman exists though, because some banks weren't/aren't solving complaints correctly and as an independent counterbalance on this.

In relation to the stage process, I know this still goes on with Bank of Ireland as I have a mortgage complaint that went to stage three very recently before I could ask an Ombudsman to look at it.

That's odd. It might be worth letting the FCA know because (as mentioned) everything should be one-stage-then-ombudsman now and they'll likely take a dim view of two stages, let alone three!

In any event, if it's been longer than eight weeks since Bank of Ireland first received your complaint (regardless of stages) you have FOS rights and should give them a buzz.

bluffer

it may be terminology.



even with a final response, customers often go back to the bank to "appeal" it rather than go to fos. this might be stage 2 and if they "appeal" it again stage 3. so it might go final response with fos rights, confirmation of final response with fos or revised final then deadlock. it may even be exactly the same complaint handler all the way through the process.

jonesMUFCforever

Cotta wrote: »

Hi All,



Is the Ombudsman an easy option for banks at times or do they generally get it right?

I don't think any bank willingly goes to the ombudsman. As cases cost them £500 or so it is cheaper for them to settle before it gets to that state?

Cotta

jonesMUFCforever wrote: »

I don't think any bank willingly goes to the ombudsman. As cases cost them £500 or so it is cheaper for them to settle before it gets to that state?

I thought this figure was proven to be incorrect?

JuicyJesus

Cotta wrote: »

I thought this figure was proven to be incorrect?

The actual fee is higher, although the largest firms (with the most complaints) now bulk pay per year. The amount of the bulk fees isn't disclosed by FOS.

Uxb

I also thought the financial group gets the first 15 complaints referred to the FO free of charge - though I suppose most large financial groups would reach that number by 0915hrs on the 2nd of January each year...

Thrugelmir

Cotta wrote: »

Fair points but I was referring more to the fact that sometimes banks were referring cases to the Ombudsman that they could have easily resolved internally.

Let the Ombudsman adjudicate. Then there's a benchmark for similar issues. Time costs money. When people are involved.

Uxb

Well the FO has just rejected my recent complaint on the basis that the increasingly irate emails passing back and fro between me and the financial company concerned and the total breakdown in communication did not represent either a formal complaint or that the final "we refuse" email from the company did not constitute a formal final offer.

Excellent - so I can waste even more time of the company and the FO by starting the process all over again.