How to complain and fight for your rights

Find out how to complain if you think you've been treated unfairly by a financial company.

If the latest figures from the Financial Ombudsman Service are anything to go by, more and more bank customers are refusing to put up with shoddy service and rip-off sales tactics.

In the second half of last year alone, the Ombudsman dealt with 80,000 grievances, a rise of almost a fifth on the same period in 2008.

More than half the complaints related to the five biggest banking groups – Lloyds, Barclays, HSBC, Santander and Royal Bank of Scotland/Natwest.

Payment protection insurance (PPI), which is thought to have been widely mis-sold by a number of banks and loan firms, was the most complained-about product.

Of course, it’s not just banks that have let customers down: the Financial Services Authority (FSA) has been stepping up its campaign against rogue advisers in recent months.

One firm of independent advisers has, for example, just been ordered to pay out £7.8 million to clients who were given poor guidance on investments and pensions.

So if you think you have grounds for complaint against a financial firm, what’s the best way to go about it?

Is your complaint justified?

The first thing to work out is whether you have a legitimate grievance. Investments offer a good illustration: you can not complain simply because the value of the shares or funds you have bought goes down.

But if your adviser failed to warn you that there was a risk you could lose money, you may well be entitled to compensation.

The FSA and the Ombudsman say that firms should ‘treat customers fairly’: if you feel you haven’t been treated fairly, and have suffered some form of loss as a result, you can probably complain.

Bear in mind that time limits may apply to your type of complaint: for example, you can only complain about unfair bank charges if they have been levied within the past six years (five years in Scotland).

• Adopt our goal: Reclaim bank charges

Getting help

The internet is a great source of assistance when you’re complaining. Whatever has happened to you has almost certainly happened to someone else before, and there’s probably a record of it on the web.

With common issues such as payment protection insurance, you’ll also be able to find template complaint letters to help you get started. These will make sure you don’t omit any vital information.

Pursuing your complaint

You will increase your chances of success if you keep a record of each stage of your complaint, along with any relevant paperwork such as bank statements, loan agreements or key facts documents.

Make a note of anyone you talk to on the phone, but if possible try to stick to email or written correspondence so you have clear evidence of what has been said.

If you do talk directly to the company’s staff, try to remain calm and polite. It might not be easy, but it is likely to produce better results.

Also, think about what you want your complaint to achieve: if you’re looking for compensation, what would be a fair amount?

Step 1: The company

To get the ball rolling, you have to complain to the company’s customer services department or head office. It’s best to do this in writing or by email.

If you haven’t given the bank or adviser the chance to sort matters out, the Ombudsman or the courts are not likely to look very favourably on your case.

You can ask the firm for a copy of its complaints procedure: this should tell you who to write to, when you can expect a response, and what to do if the response is unsatisfactory.

Step 2: The Financial Ombudsman

The firm you complain to has eight weeks to put matters right to your satisfaction.

If you’re not happy at this point, or if the company has simply failed to respond, you can move your case on to the Financial Ombudsman Service.

The Ombudsman upheld just over half of cases in the second six months of 2009, so it is well worth using the service – it costs nothing except the time you put into your complaint.

The Ombudsman process starts off in quite an informal way, but if either side refuses to agree with an initial ruling, the case can be examined in more depth.

The service says it aims to deal with complaints in six to nine months, and that a third of cases are settled within three months.

Step 3: The courts

If the Ombudsman does not support your case, it is unlikely that the courts will either. But for matters concerning losses of less than £5,000 you can take your grievance to the small claims track in the county court without the risk of incurring huge costs.

Paying for help

One of the UK’s biggest growth industries in recent years has been complaint-handling. There are now scores of firms which will offer to help you get huge sums in compensation from the banks for mis-sold loan insurance, or unfair credit deals.

Typically, though, you’ll pay through the nose for the service. Many complaint-handlers charge up-front fees, which you may not get back if your case is turned down.

And if you are successful, the company can take as much as a third of your payout for its trouble. You can find out more in The top five biggest debt scams.

There is so much free help available to wronged consumers online and from organisations such as Citizens Advice, there really is little reason to pay for assistance such as this.

More: Your rights if you change your mind | How to complain – and actually get your way