Get £500 For Pain Caused By Your Bank

If you feel you've been treated unfairly by your bank, lender, pension provider or other financial company, there's a simple but effective way to get your money back, plus up to £500 in compensation.

If you have a dispute about a financial product, your first step is to try and resolve it with the provider. If this fails and you still feel you've been wronged, it can't hurt you to go to stage two: contact the Financial Ombudsman Service (FOS). The FOS is independent. It looks at your case for free, and your name and personal details are not made public. (The FOS tends to refer to people as Mr. G, Mr. L and so on. I think they could be more imaginative, like in Dav Pilkey's unbeatable book. That would make writer Cliff D'Arcy `Mr. Buttercup Bubblegorilla' and my editor `Mr. Crusty Toiletbuns'. It would also make reading the FOS' updates less dry for us writers.) The FOS will first ask the financial company to respond to your complaint against it, and then it makes a decision that is binding on the financial company, but not on you. If the FOS takes your side, it can order financial companies to apologise and reimburse you. It's also not unusual for it to order the company to compensate you for distress or inconvenience. This is typically £150 to £500. The following table shows how often complaints are settled in the customer's favour, and how often the FOS' decision is a mixed result for the customer and the business: Upheld FOS Complaints By Product (April 2007 to March 2008) Complaint FOS agreed with the customer Mixed outcome Current accounts 84% 4% Credit cards 79% 7% Motor insurance 47% 4% Payment protection insurance 45% 2% Unsecured loans 37% 7% Buildings insurance 35% 6% Stockbroking, and portfolio and fund management 35% 6% Travel insurance 35% 3% Contents insurance 33% 4% Other banking services 32% 16% Whole-of-life policies and savings endowments 32% 8% Investment bonds 32% 6% Medical insurance 32% 1% Mortgage endowments 32% 0% Mortgages 30% 8% Savings and deposit accounts 28% 12% Personal pensions 16% 2% *Note that the excellent figures for current-account and credit-card complaints is probably due to the large number of successful claims last year for penalty charges. How the FOS typically helps Here are some example complaints that have been upheld by the FOS recently: ATM scam Mr. A tried to withdraw cash but the screen failed to work. Shortly after, a crook used his details to withdraw two lots of £300 from two different machines. His bank refunded him £300, but said that he was negligent so didn't refund the second £300. Mr. A complained to the FOS. On investigating, it found that he should be refunded, and ordered the bank to do so. It also ordered the bank to pay £100 compensation for the distress it caused. Foreign credit-card purchase Mr. B made a purchase for _291.80 and kept the receipt. However, his credit-card statement showed a transaction amount of _2,918. Mr. B swiftly reported this, but the card provider refused to refund him. The FOS said that due to the particular factors of this case Mr. B should be reimbursed. It also ordered the company to pay £250 for the inconvenience caused. Extended warranties Mr. M arranged to have damp-proofing on his house, but nine years later he discovered that the property had been suffering from recurring damp. His extended-warranty insurer refused to cover him because he could just provide copies of the damp-proofing documentation supplied by the builders. The policy demanded that Mr. M provide the originals. The FOS found that the insurer should firstly have made this requirement much clearer in the policy documentation. Secondly, it found that the insurer was unfair to demand originals when there was no real doubt that Mr. M was entitled to the benefit of the policy. It ordered the insurer to deal with the claim and reimburse Mr. M for the administrative fee it had charged him. How fast is the FOS? Last year the FOS settled over half of mortgage, banking and insurance cases within three months, and half of endowment cases within nine months. That's OK, I think. However, the FOS today announced statistics for last year, and it handled record numbers of enquiries and complaints. It had almost 800,000 initial enquiries, 120,000 of those became complaints for the FOS to resolve. This is up 30% on the previous year. Therefore, if complaint numbers continue to grow and the FOS doesn't hire more people, the service may get slower. If you find the FOS is too slow, or if you don't agree with its decision, you can take the financial company to court. You can even take the company to court at the same time as making a claim through the FOS. However, if you accept the FOS's decision and any settlement based on it, you can't then take the financial company to court for more. If you have a complaint that you feel has cost you money, and the company has rejected your complaint, I recommend you approach the FOS. However, please bear in mind that the FOS does not at present deal with claims regarding bank charges. The Financial Services Authority, which oversees the FOS, has ordered it to hold off until a big court case on this matter has been resolved. At present, the banks are appealing the latest court judgment on these charges, so this could be dragged out for some time. Good luck, Zippy Barfbuns (aka Neil Faulkner)