James Moore: Banks behaving badly may lead to outsourcing the ombudsman

Outlook Problem with your credit card? Fear not: Your bank's helpful staff in Mumbai will sort it, so long as your issue is on the right menu. Issue with its IT systems? Those nice chaps from R. Ubbish Technical Solutions will investigate.

Banks love outsourcing. It generates huge, short-term savings that chief executives and finance directors lap up because they can show off colourful, PowerPoint presentations to analysts. Any problems only tend to show in the longer term and are therefore an issue for the next guy to deal with.

Yesterday, the Conservative MP Mark Garnier, a former investment banker, suggested the trend has gone further than we thought.

While grilling various Barclays compliance, audit and risk people under the baleful eye of investment banking head honcho Rich Ricci at a panel of the Parliamentary Commission on Banking Standards, Mr Garnier argued that banks have, in effect, outsourced their complaints departments. And he's got a point.

The body which now oversees the really serious complaints about Barclays (and the others) is the Financial Ombudsman Service (FOS), which is now so swamped with work it might need to call on Mumbai just to meet its mushrooming need for bright case handlers.

Largely that's because of the payment protection insurance scandal, where a stunning 93 per cent of gripes are upheld, according to Mr Garnier.

That does make it something of an outlier, but the numbers are still high in other areas. Some 40 per cent of general banking complaints get upheld, 32 per cent relating to home finance, 50 per cent about investments and a third relating to insurance.

What we don't know from these figures is how many complaints rejected by banks don't even get to the FOS because those involved give up.

I've heard numerous stories from people where this is the case. They've become so cynical about what they see as a system weighted against them they never get as far as filling in the FOS form.

Banks are well aware of this. So they'll correct blatant errors, where they have been caught bang to rights. But when it comes to more marginal calls, it pays them to say no and leave it to the ombudsman to take over because so many people just give up.

Still, don't worry. Mr Ricci is on the case. He's the man behind Project Mango, a review of Barclay's investment bank. Perhaps it could be extended to the retail side.

Mr Ricci says Barclays really wants to understand why people don't like it so much. So 120 top bods got together and listened to all sorts of clever people and consultants from other businesses that have had the odd reputational problem. During that session they heard a lot from zoos. No, I'm not making this up. But I do wonder what the zoo keepers said about their charges' behaviour after being tossed a bunch of mangoes.

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Britons buy more than 30 million handsets each year, keeping them for an average of 18 months
tech
Arts and Entertainment
Alloysious Massaquoi, 'G' Hastings and Kayus Bankole of Young Fathers are the surprise winners of this year's Mercury Music Prize
musicThe surprise winners of the Mercury Prize – and a very brief acceptance speech
Arts and Entertainment
TV Presenters Ant McPartlin and Dec Donnelly. Winners of the 'Entertainment Programme' award for 'Ant and Dec's Saturday Night Takeaway'
musicAnt and Dec confirmed as hosts of next year's Brit Awards
Arts and Entertainment
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
film
News
video
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Market Risk Manager - Investment Banking - Mandarin Speaker

£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Day In a Page

Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes
Independent writers remember their Saturday jobs:

Independent writers remember their Saturday jobs

"I have never regarded anything I have done in "the media" as a proper job"
Lyricist Richard Thomas shares his 11-step recipe for creating a hit West End musical

11-step recipe for creating a West End hit

Richard Thomas, the lyricist behind the Jerry Springer and Anna Nicole Smith operas, explains how Bob Dylan, 'Breaking Bad' and even Noam Chomsky inspired his songbook for the new musical 'Made in Dagenham'
Tonke Dragt's The Letter for the King has finally been translated into English ... 50 years on

Buried treasure: The Letter for the King

The coming-of-age tale about a boy and his mission to save a mythical kingdom has sold a million copies since it was written by an eccentric Dutchwoman in 1962. Yet until last year, no one had read it in English
Can instilling a sense of entrepreneurship in pupils have a positive effect on their learning?

The school that means business

Richard Garner heads to Lancashire, where developing the 'dragons' of the future is also helping one community academy to achieve its educational goals
10 best tablets

The world in your pocket: 10 best tablets

They’re thin, they’re light, you can use them for work on the move or keeping entertained
Lutz Pfannenstiel: The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents

Lutz Pfannenstiel interview

The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents
Pete Jenson: Popular Jürgen Klopp can reignite Borussia Dortmund’s season with visit to Bayern Munich

Pete Jenson's a Different League

Popular Klopp can reignite Dortmund’s season with visit to Bayern
John Cantlie video proves that Isis expects victory in Kobani

Cantlie video proves that Isis expects victory in Kobani

The use of the British hostage demonstrates once again the militants' skill and originality in conducting a propaganda war, says Patrick Cockburn
The killer instinct: The man who helps students spot potential murderers

The killer instinct

Phil Chalmers travels the US warning students how to spot possible future murderers, but can his contentious methods really stop the bloodshed?
Clothing the gap: A new exhibition celebrates women who stood apart from the fashion herd

Clothing the gap

A new exhibition celebrates women who stood apart from the fashion herd
Fall of the Berlin Wall: Goodbye to all that - the lost world beyond the Iron Curtain

The Fall of the Berlin Wall

Goodbye to all that - the lost world beyond the Iron Curtain