Bank customers missing out on millions in compensation claims
CUSTOMERS are being denied the right to make compensation claims that could run into millions of pounds because they are being ignored by the high street banks that sold them financial products, and receive little help from the Financial Services Authority.
A damning report on the matter has led to its author, the Financial Ombudsman Service, calling for the introduction of US-style Class action suits to deal with compensation claims.
The FOS’ annual report found that 60% of complaints it hears are being settled in favour of customers, as opposed to average figures of between 30 and 40%. It also pointed out that since consumers must first complain to their bank before going to the FOS, some genuine compensation claims are being turned down, and those claimants are not being helped by the Financial Services Authority.
The House of Lords economic affairs committee is expected this week to call on the FSA to focus “more directly” on consumers. The FOS said it investigated 40% more complaints than it expected in the year to the end of March, with cases hitting a record 127,471.
Disputes about insurance rose 84%, driven by a tripling of the number of complaints over payment-protection insurance (PPI). Credit-card complaints rose 32% to 18,590 — 76% of which were upheld. Investment complaints jumped by 111%, while complaints about mortgages rose by 11%, largely due to disputes over the handling of mortgage arrears, of which 40% were upheld.
If you believe you have a case to make a compensation claim, you must first complain to the bank that sold you the financial product, which has eight weeks to respond. If it fails to do so or rejects your complaint, you have six months to take your case to the FOS.