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Spend & Save

Shoddy service? Lost cash? Don't just moan, put in a complaint

Everyone has had a problem with their bank or insurer. Fight back with these tips on the right strategy to get a result. Chiara Cavaglieri reports

It's hard to imagine an individual who hasn't had reason to gripe about their bank or insurer at some point. This is certainly the impression given by the latest Financial Ombudsman Service report into banking complaints released last week. In 2011 as a whole it seems banks were hit with a tidal wave of complaints.

Even without the fiasco of payment protection insurance, the FOS saw complaints increase in all other areas, rising 41 per cent from 181,449 to 256,118 compared with 2010. PPI cases only fell in the last six months of 2011 because the Financial Services Authority has allowed banks more time to deal with a backlog of cases and the FOS still receives complaints about it at a rate of 1,000 a day.

For those who dare to complain, it can often seem a fruitless exercise but there are ways to increase your chances of success.

"The FOS data is further evidence that some banks are systematically failing to treat their customers fairly when things go wrong," says Peter Vicary-Smith, the chief executive, of Which? "It is especially unacceptable that tens of thousands of consumers have been forced to take their PPI compensation claim to the ombudsman, where the overwhelming majority of complaints are then upheld."

If you have a complaint you should act as soon as possible. If you leave it too long you may forget important details which could strengthen your case, and there are crucial time constraints which may scupper your chances for redress. Your first step is to ask to see a copy of the company's complaint procedure (under FSA rules all banks must have one) so you know which steps to take.

Make sure you complain to the right person; if you can't complain to the person you originally dealt with, ask your bank for a senior person to contact. At every stage you should make a note of who you talk to and when, as well as the response. Don't rack up a huge phone bill talking to expensive 0845 and 0870 customer services numbers. Use websites such as www.saynoto0870.com to find cheaper numbers. "Keep a detailed record of every call or face-to-face contact you make and of any decisions or promises you have been given. Take the name of the person you spoke to for future reference," says Sarah Brooks, a director of financial services at Consumer Focus.

Your letter should include basic details such as your account number and address, as well as a clear and concise explanation of your problem and whether you are seeking a refund, compensation, or simply an apology.

If you have any documents, contracts, or receipts, send photocopies, not originals. To make your position clear head any emails and letters with the subject line "Complaint". The tone of your letter should be factual and polite; you can find template letters from consumer organisations and websites like Which?, Money magpie.com and Moneysavingexpert. com.

Once you've sent your letter, the bank should get back to you within eight weeks. If your complaint is about something you brought with a credit card between £100 and £30,000, you may be covered under Section 75 of the Consumer Credit Act. If you are, you can make your complaint to the credit card provider.

As for third-party firms offering to take on your complaints, particularly with PPI, beware they can routinely take up to 40 per cent of your compensation. The FOS chief ombudsman Natalie Ceeney cautions: "There are lots of businesses that will offer to make your complaint for a fee, but there is no need to pay to make a complaint. Why pay someone else to do it for you when you're just as likely to win by doing it for yourself for free?"

If you aren't satisfied with the response, contact the company again and tell it you are planning to go to the FOS. Within eight weeks the company must send you a "final response" letter and if you're still unhappy, you can take your complaint to the ombudsman. If they accept your complaint it could take between six and nine months to reach a decision.

"The ombudsman settles thousands of disputes each year and upheld an average of 72 per cent of complaints in the second half of 2011 so it's well worth doing," says Mr Vicary-Smith.