For many, the relationship they have with their bank is the most important - certainly the longest-lasting - of all the institutions they will deal with in the course of their lives. But what happens if things go sour between you and the bank manager?
Established in 1986, the Banking Ombudsman's office is the place to go. The Ombudsman is David Thomas, a former solicitor who has worked in many legal fields. His office employs a staff of more than 40, many of whom are lawyers, to deal with customers' complaints.
The service, which is provided free to complainants, is funded by 111 banks which are members of the scheme. Its annual operational budget is just under pounds 2.6m.
Despite being funded by the industry, the Ombudsman and his staff fiercely defend their independence and impartiality. During the year to 30 September 1997, marginally more decisions were in favour of customers than banks.
The office can deal with complaints from individuals, sole traders, partnerships, unincorporated bodies such as members' clubs, and companies with an annual turnover of less than pounds 1m. More than 80 per cent of complaints are from personal customers.
The office will not deal with complaints that have not first been referred to the bank concerned. Most banks issue a leaflet outlining their complaints procedures. The office also publishes a guide, Complaining to the Bank. This contains useful tips for customers to follow and emphasises the need to keep copies of correspondence and notes of conversations.
Normally, banks first require complaints to be made at branch level. If unresolved, they are then referred to a regional office and then to head office. Customers who are not satisfied with the response they receive may then refer the matter to the Ombudsman. However, a "deadlock" letter from the bank, confirming that they have reached the end of its procedures is required. Should a bank delay providing this, the Ombudsman's office can help.
Customers are allowed six months from the issue of a deadlock letter to complain to the Ombudsman. Upon receipt of a complaint form, the office tries to resolve the issue quickly by conciliation. This may involve either party's attention to relevant factors. Normally this process takes two to three weeks.
If conciliation does not resolve the matter, the complaint is subjected to an investigation, which could take some months and involve all parties in a considerable amount of effort.
In the five years up to 30 September 1997, the Ombudsman's office received 8,818 complaints, of which 2,388 could not be dealt with, as they either should have been referred elsewhere, or fell outside the scheme. Of the 6,430 valid ones, 674 went to investigation. In a third of these cases, either the bank or the customer asked for the decision to be reviewed.
While the banks have to accept the Ombudsman's decision, customers do not, and may choose to resort to the courts. Compensation recently awarded under the scheme ranged from pounds 21 to pounds 90,000, the average being pounds 2,805. In 75.3 per cent of cases, the Ombudsman awarded more than was previously offered by the banks.
The top five areas of complaint are: lending (16.6 per cent); mortgages (14.1 per cent); charges and interest (8.5 per cent); account errors (6.6 per cent) and discourtesy or delay (5.4 per cent).
The Office of the Banking Ombudsman may be contacted on 0171-409-9944, or by writing to 70 Gray's Inn Road, London WC1X 8NB
What You Can
Customers may complain to the banking
Ombudsman about about:
Banking services (including mortgages)
Credit card services
Executor and trustee services
Advice and services relating to taxation,
insurance and certain investments
The services must have been provided in or from the UK, but include transactions abroad using cards issued in the UK. Unless there has been maladministration or unfair treatment, the office cannot deal with complaints about a bank's:
Commercial judgement relating to lending or
Decision in exercising a discretion under a will or
trust, including its failure to consult
beneficiaries unless required to do so
...And What You Can't
Complaints cannot be handled:
About a bank's general interest rate policies
About general bank policies and practices
Where the claim, including any possible related claim, could exceed pounds 100,000
In situations where a court is involved - unless
the bank agrees
The office will also not deal with a complaint where the customer has suffered no loss or inconvenience, and in situations where it believes the bank has already offered adequate compensation. General advice is not given about banking, financial matters or debt problems.