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Spend & Save

Simon Read: Don't take no for an answer if you complain to your bank

Two major banks are facing million-pound fines for their poor complaints handling. The Financial Services Authority (FSA) has refused to name the banks concerned but rumours suggest they are likely to be the government-owned Lloyds Banking Group and RBS. In fact, the City watchdog has demanded five banks change the way they deal with complaints, while referring two to enforcement for further investigation, which generally means fines will follow.

The news will come as no surprise to anyone who has had dealings with any of the high-street banks lately, as customer service has become appalling. But the FSA's latest investigation uncovered the shocking fact that the banks have been paying staff bonuses if they kept complaint levels down to certain levels.

That's shocking because it confirms that delaying tactics and passing on misleading information about customers' rights was not just the actions of a few rogue staff but, by dint of the bonus payments, the unhelpful behaviour was effectively bank policy. "This is another damning indictment of the banking industry, many of whose members consistently put sales before customer service," the Which? chief executive, Peter Vicary-Smith, says.

"Bonuses should be linked to treating customers fairly and the resolution of complaints, not to sales. What's more, consumers have the right to know which banks the FSA is referring to its enforcement division. If the UK's banks want to win back the public's trust, then they must fundamentally change the way they treat their customers."

A quick straw poll among friends confirms the widespread dissatisfaction with banks' service – not one person says they were treated well. And that's for normal, day-to-day account handling. If banks can't provide a basic level of service, no wonder they've struggled when it comes to dealing with complaints, which have come in in their hundreds and thousands in recent times.

The FSA says it will force banks to respond properly to customers and treat them fairly. But my advice is to vote with your feet and switch accounts if you encounter bad service. Sadly, I'm not able to recommend any one bank to move to as there's evidence of bad service from all of them – which is shocking in itself.

Forced retirement should be scrapped, according to Age UK. The charity is urging the major political parties to change the law, which forced some 120,000 older workers to retire last year despite their wanting to carry on working. "The default retirement is not only an unfair, outdated piece of legislation, it also causes real harm to our economy and public finances by depriving the labour market of experienced, skilled workers who would otherwise be paying taxes," says Michelle Mitchell of Age UK.

The charity's contention is that forcing older workers to retire costs the UK an estimated £3.5bn in lost economic output in a year. "Scrapping the default retirement age is a simple step to boost public finances," says Mitchell. But it would also give people control of their own lives back.

Research from Prudential on pension saving published this week found that just over half of British savers fear outliving their pension, because life expectancy has increased and so has the cost of retirement. Giving people the right to work longer would give them more time to build up their pension pot and less time to fear living on penury. I think it's the least we should do for workers.

Government must tackle identity theft

identity theft has climbed 20 per cent in the past year, reports Cifas, the UK's fraud-prevention service. Frighteningly, the trend of identity theft where the crooks use their victim's current address has soared 45 per cent.

While the fraudsters simply want to steal our cash, the effect of the crime can be more chilling than having a few pounds siphoned out of your bank account. Victims of impersonation often report feelings of uncertainty, helplessness and not knowing whom to trust – on top of the financial impact suffered and the time taken to rectify the damage. The impact of fraud, therefore, must always be seen as something far greater than just a financial one, Cifas says.

"The prevention of this crime must be given the attention that it demands by a new government," Peter Hurst, Cifas's chief executive, says. "The National Fraud Authority estimated the cost of fraud to the UK economy at £30bn per year – and the best way to reduce this is to prevent fraud."