FOOL'S EYE VIEW
How To Complain About Financial Products

By Jane Mack (TMFJane)
February 6, 2003

If you've ever had to complain about a financial product or service, you probably had a bit of trouble trying to find out whom to complain to. Not that long ago there were half a dozen different places to go but these days you can go straight to the Financial Ombudsman Service. It's independent and also free.

If you've got a problem with your bank, building society, insurance company, investment firm, financial advisor or stockbroker that you haven't been able to resolve, then there's only one port of call you need to know about. It can deal with complaints ranging from pet insurance and pension plans to mortgages and investments. At the moment though, it would appear to dealing with a lot of complaints about split captial investment trusts, mortgage endowments and Equitable Life as it has special FAQ sections on each of them.

Obviously the Ombudsman is the last resort. Consumers are expected to try their best to resolve any disputes directly with the organisation concerned and to follow the company's own complaints procedure right the way through. The Financial Ombudsman Service web site has an excellent section telling you how to complain effectively. It's all too easy to get het up and angry with an organisation. But the person on the other end of the phone or who is reading your letter of complaint is a human being too! If you're rude, they might not feel inclined to bend over backwards to help sort the problem out. (By the way, if you're not sure what your rights are with respect to a particular financial product then this section of the FSA web site can help out.)

But what happens if you don't get anywhere? How can the Ombudsman service help?

The first thing is to get hold of their complaint form, either by phoning them on 0845 080 1800 or by visiting their website. The form tells you exactly the sort of information they need and they will then use it to act as an informal mediator between you and the company concerned. If that doesn't work, an adjudicator will hold a full investigation into the case before coming to a decision. The Ombudsman reckons that of the cases that do require an individual final decision between a third and a half are resolved either wholly or partly in favour of the customer. Only 15% of the cases it looks at require a final decision though. It aims to resolve three-quarters of cases within six months and all of them within twelve months. 

The powers of the Ombudsman are quite extensive. The Financial Services and Markets Act 2000 gives the Ombudsman its own legal powers to tell the offending organisation to put things right. Its aim is to put you in the position you'd have been in if things hadn't gone wrong in the first place. Also, its decisions are binding on the firm up to a total of £100,000. It's not a punishment or a fine -- it's simply means of ensuring that you are reimbursed for any money you've lost.

Obviously, if the Ombudsman thinks you're wrong, then you'll be told as much! But the good news is that while its decision is binding on the company, it's not binding on you. So if you disagree with the outcome, you're still free to take the matter to court if you want to.

Bear in mind that you need to make any complaint to the Ombudsman within six months of getting the final response letter from the company you're having trouble with. So don't dither!

A version of this article was orginally published in November 2001.