Murphy's law lacks bite

The Building Societies Ombudsman can be very useful for clawing money out of naughty societies that pay poor interest rates and, for borrowers in difficulty, sometimes sending societies packing. Without, importantly, charging consumers a penny. Ombudsman Brian Murphy ruled in favour of consumers in almost one in two cases last year (see this page).

Complaints about windfalls (not getting them) comprised most of the increase in cases. And Mr Murphy is bracing himself as more handouts come to fruition, or are announced.

But it is significant that with the only windfall actually paid yet, that for the takeover of the Cheltenham & Gloucester by Lloyds Bank, the Ombudsman has not ruled in favour of a consumer in a single case.

Bizarrely, the Ombudsman says he is not allowed to rule on many common windfall gripes.

For example, as his powers stand, he cannot tell the Halifax that it should pull its finger out and hand over its free shares quicker, or that it should give windfalls to its 1 million customers who are excluded because their accounts do not make them members. He cannot tell the Woolwich it has acted unfairly by imposing an early cut-off date to exclude "carpetbaggers".

Mr Murphy says he can consider the fairness of recent moves by smaller societies to throw out alleged carpetbagging savers - closing accounts of people with low balances or who don't live locally.

The distinction between such complaints might seem technical. But important, too, because the Ombudsman provides the obvious source of easy redress for consumers.

Conceivably we could end up with the situation where an ombudsman scheme, which should have at its core the cheap and simple resolution of legitimate grievances, cannot actually rule on the majority of complaints. Not so much a toothless watchdog but one that is kept on a vegetarian diet.

The excluded are left with the courts, or the possibility of a new bidder for a society offering a more attractive deal. But that seems less than satisfactory, as does one other potential source of help - the government's building society bill. This could require societies to include more customers in handouts or enlarge the Ombudsman's powers. But even if it includes such lifelines, they are unlikely to be in force before next year.

CYCLING appears to be enjoying a mini-boom. Halfords, Britain's biggest cycle retailer, reports sales up on last year. But anyone converted to the virtues of two wheels by recent good weather or, indeed, Thursday's tube strike in London, should beware of many of the specialist insurance policies around. It is quite possible to be charged a premium of pounds 50 for a bike worth pounds 200. The same policy may also require you to pay the first 10 per cent of any theft or damage claim, and accessories may be excluded. This is expensive insurance - an expensive accessory, even.

Normally the cheapest way of insuring a bike will be through an extension to an existing home contents' policy - assuming you have one - rather than buying a separate policy. For the same pounds 200 bike you might pay less than pounds 10 extra a year. But the London Cycling Campaign (0171-928 7220) warns that insurers may not offer such a good deal to people who live in converted houses with shared entrances and who park bikes in the hallway. Most insurers will also insist that, when leaving your bike outside, you lock it to an immovable object. Indeed, a decent lock (the experts recommend a solid D-shaped model) may well be the most sensible insurance you can buy.

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