Who do you turn to when experts let you down?

CONSUMERS ARE getting a raw deal from banks, insurers, building societies and other financial institutions, because our system of investor protection has all but broken down, a watchdog is expected to reveal on Monday.

These are the depressing conclusions of research by the Financial Services Authority which will disclose that a quarter of all dealings with financial institutions lead to a complaint. Yet only one in 10 of the aggrieved customers pursues a dispute to a successful conclusion because of the complex and unwieldy nature of our system for seeking redress.

But the day of reckoning is nigh. The watchdog is planning a new system of policing the industry and it is reviewing how firms handle complaints. A single ombudsman is to replace the current labyrinthine network of 11 adjudicators. Part of the problem is the shortage of information about what customers can do to ensure a fair deal. One in three of those questioned had never heard of any financial ombudsman.

To help such people, the FSA has produced a guide on how best to win a complaint, and not be fobbed off by the company.

It is scarcely surprising that consumers are confused. Someone with a complaint about a pension, for example, could have the dispute heard by the Pensions Ombudsman, the Pensions Advisory Service, the Personal Investment Authority, the Investment Ombudsman, the Securities and Futures Authority, the Financial Services Authority or the Banking Ombudsman, depending on the nature of the complaint. And you may have to contact almost all of these, before finding the appropriate procedure.

Yet, where customers do pursue their disputes to the bitter end, the reward can be sweet. One couple received compensation after they were mis-sold a 25-year endowment mortgage costing pounds 1,300 a month, just 11 years before they were due to retire. They won their case because the sales rep had failed to consider how they would keep up the repayments after they had retired.

Another couple complained when they accepted a cheque for pounds 1,350 after checking with the bank that it had cleared. But the next day it bounced. They were compensated because the bank had failed to explain that "cleared" simply meant there were deposits in the account to meet the cheque. It was not a guarantee that they would have first call on this money.

The parents of a 16-year-old boy appealed to an ombudsman after he was sold a life insurance policy. They got short shrift from the company, though he had no dependents, no need for life assurance and no money to keep up the premiums.

The chief watchdog recommends a four-point plan filing a complaint.

First, contact the company and explain what you are unhappy about. Keep records of any telephone conversations. If it is not sorted out, inform them that you want to make a formal complaint. Send copies of any relevant documents, but keep a copy of everything for yourself.

If you are still getting nowhere, write to the chief executive outlining your problem and send a copy to the compliance officer, who makes sure the company abides by the law.

When you have exhausted your efforts here take your complaint to an ombudsman, who can order up to pounds 100,000 compensation. You cannot appeal to an arbitrator until you have gone through the firm's internal process. If you are unhappy with the ombudsman's findings you can go to court.

More information: Financial Services Authority helpline 0845 606 1234.