Previously editor of the Sunday Times money section for ten years, Diana Wright is a freelance personal finance journalist. She now writes a regular column - A Question of Money - for the paper, dealing with readers' financial problems
by Diana Wright
‘Please help, I am desperate and at the end of my tether.’
I must have read those words a dozen times a week, every week, in all the years that I have been the financial agony aunt of the Sunday Times.
What follows has changed over the years. In the early years of this century it was endowment mortgages failing to meet their target. Today it’s more likely to be problems with online banking, with money going ‘missing’ en route from one cash ISA provider to another, with failed or botched insurance claims, or lost or inadequate pension or assurance plans.
I try to resolve them, and usually do. But the column wouldn’t be complete without a mini-sermon to the perpetrator of the crime. As the great-granddaughter of a Methodist lay-preacher, I have clearly found my vocation. The sermon changes very little. It’s a challenge to find different words sometimes. But it’s depressing in the extreme that I don’t need to. It can be summed up maybe in one word: THINK.
If organisations genuinely thought first about the needs of their customers, and about the reasonable abilities of their customers to run their financial affairs and to understand the products and services offered, then at least half the problems I see simply wouldn’t exist.
And organisations need to think about their own capabilities too. It’s worse than useless setting up a 24/7 telephone helpline if the staff are underpaid, under-trained, in some cases have inadequate command of English and – as so often – have little or no power to sort matters out on their own. Equally, it’s worse than useless to have sympathetic and friendly branch staff if they don’t understand their own products or their own head-office systems for directing and resolving complaints.
And it can also be worse than useless to have a slick complaints procedure that kicks in at the slightest hiccup, but delays yet further the actual resolution of the problem.
Back in the pre-dawn of financial regulation, Professor Jim Gower started his first report on the regulation of financial markets with a single underlying principle: that consumers should be allowed to make fools of themselves but should not be made fools of by the financial services industry.
Much has changed since those days and that one-liner now seems woefully inadequate. But when you consider the big mis-selling scandals – from endowments, credit card and bank charges, personal pensions all the way through to PPI – and when I think of the thousands of problems, large and small, which cross my desk every year – a financial services industry that genuinely accepted and acted upon that one sentence would have avoided just about every single problem.
Mistakes will always happen, sure. But a mistake put right at once isn’t a complaint. And the Financial Ombudsman Service – and I – and all those other financial journalists – would be out of a job. Just think!
Asking me to pick out just three favourite case studies from ten years of ombudsman news is the modern equivalent of peine forte et dure.
Admittedly, the ombudsman service isn’t attempting to crush me with heavy stones – only with copies of ombudsman news, almost all of which, sad to say, I have kept, since the first issue back in January 2001, featuring a fresh-faced first chief ombudsman, Walter Merricks, on the cover.
My choices of case studies are from the byways rather than highways of the publication. The first two are, frankly, elderly. But they are as relevant today as they were when first published. And every year I am able to help readers to a fairer settlement thanks to their publication. In some cases, I haven’t needed to do anything at all except say: ‘Go back to your provider and tell them to look at ombudsman news issue number so and so, case number whatever.’ And sure enough, I have shortly thereafter received a delighted email from my reader saying all has been satisfactorily resolved.
The first case study I’ve selected concerns the insurance settlement offered for antique jewellery after loss or theft. Offering vouchers to replace cherished and unique antique items at some modern store – or taking a 20% reduction if the insured insists on cash – is just not on, as this case study makes clear.
This topic actually featured in that very first issue, but case study 75/10 from January/February 2009 neatly encapsulates the issues. It is, of course, depressing that insurers are still trying it on – so I reckon this case study is due for another outing.
75/10 – policyholder told by insurer to replace stolen antique jewellery by selecting new items from a limited list of high-street retailers
The second case study relates to unit-linked whole-of-life plans. Again, this may not be one of the big hitters of the ombudsman’s case studies. Last year only a couple of thousand such complaints were received, as against tens of thousands of PPI cases. But I know from first-hand experience how many (now often elderly) readers have found to their dismay that what they thought was a rock-solid cornerstone of their financial planning turned out to be built on sand.
Hoping to leave decent sums to their children they find – after many years of diligently paying premiums – that the insurer suddenly demands massively increased payments – double, triple, quintuple. In many cases, this makes the policy simply unaffordable and certainly makes a mockery of their careful plans. Case study 39/3 relates one such tale and its outcome – dating back to 2004 – but I don’t think this is a topic that has now faded from the scene. In fact, I have had four different readers contacting me about such a scenario just in the last week.
39/3 – as a result of review, business tells customer to double his contributions to his whole-of-live policy - or accept reduced benefits: whether business gave adequate information about reviews and their possible outcome
For my third choice, I have decided to go for balance: a case that was not upheld. Some readers are convinced the Financial Ombudsman Service is ‘useless’ and ‘in the pockets of the industry’ (just as some finance professionals no doubt assert the precise opposite). The reality is, of course, that the ombudsman service has a long history of upholding as many complaints as it rejects. But the cases it doesn’t uphold are just as important. If the ombudsman’s not impartial, it’s nothing.
Have a look at case study 72/1, regarding motor insurance. It does not make for comfortable reading. There is too much between the lines. The case may have been written up with superhuman tact, but it doesn’t hide one aspect of the ombudsman service’s work that I suspect most people simply aren’t aware of – that its decisions can, frankly, cause significant upset among family members. How tempting, it seems to me, it must be to go for the friendly option of upholding such a complaint and hence avoid causing the family ructions you just know will otherwise ensue.
If any proof were needed that the Financial Ombudsman Service is impartial – which I simply believe, no matter what brickbats are thrown at it, from both sides – it is cases like this that I would hold up as the ultimate proof.
72/1 – motor insurer declines for theft of car on grounds that car could not have been taken without the use of the programmed key