Making a formal complaint will yield best results

New consumer protection code from the financial regulator, due to be implemented in early 2007, should put customers in the driving seat, writes Laura Slattery

Moaning about poor customer service is something of a hobby for today's time-pressed, demanding consumer.

But while letting off steam in the general vicinity of the nearest person might make you feel better about a lukewarm lunch or no-returns policy, keeping calm and writing a formal letter of complaint to the appropriate official is the first step to resolving disputes with financial services providers.

The Irish Financial Services Regulatory Authority's new consumer protection code formalises the complaints procedures that financial institutions, insurance companies, stockbrokers, investment houses and intermediary firms must put in place.

At a minimum, the regulated firm must acknowledge each complaint in writing within five working days of receiving it.

So that consumers don't have to vent randomly at whichever call centre employee has the misfortune to answer the phone, the complainant must be provided with the name of one or more members of staff that the company has appointed to be the point of contact in relation to the complaint until it is resolved or "cannot be processed any further".

There are few things worse for an enraged consumer's mental health than feeling like their frustrations are being ignored.

But under the financial regulator's consumer protection code, which is due to be implemented by early 2007, the company must provide the complainant with a regular written update on the progress of the investigation at intervals of not greater than 20 business days.

It must then attempt to investigate and resolve the complaint within 40 working days of having received the complaint.

If the dispute is not resolved within this timeframe, the financial services provider must give the consumer an idea of the length of time it anticipates that its investigation will take and inform them of their right to refer the case to the financial services ombudsman or the pensions ombudsman.

Once the company has finished investigating the complaint, it must inform the consumer of the outcome of the investigation, including the terms of any offer or settlement being made, within five working days. It must also make consumers aware of their right to bring the case to the ombudsman if they are not happy with the outcome.

Under the code, regulated firms must also give customers a written summary of its complaints procedure as part of its terms of business document. And if they receive a verbal complaint, they must give the consumer the opportunity to have that complaint treated as a written complaint, rather than simply listen in the hope that the consumer is just sounding off and the problem will go away.

When the financial regulator was first set up three years ago, it commissioned research which found that 70 per cent of consumers were unsure about where to lodge their complaint about a financial institution or adviser, while 29 per cent did not feel confident about making a complaint.

Beefing up the requirements for financial services providers to put internal complaints-handling procedures in place is just one part of the regulator's brief, which is to make complaining about financial rip-offs, misleading sales tactics and negligence easier to do.

Two voluntary schemes for the insurance industry and credit institutions have been replaced by a single statutory financial services ombudsman, Joe Meade.

In his first annual report, for the nine months from April to December 2005, Mr Meade received 2,600 complaints against financial services providers - an increase of 23 per cent on the same period the previous year. A further 1,600 complaints were received in the first six months of 2006.

Consumers' chances of getting a positive result by submitting an unresolved complaint to the ombudsman are good. Last year, the ombudsman found in favour of 50 per cent of the complaints that he investigated, while others were settled amicably by mediation.

The pensions ombudsman, Paul Kenny, handles complaints relating to the maladministration of pensions schemes and disputes of fact or law.

This can include common problems such as unnecessary delays on receiving benefits, wrong information being issued and incorrect payments. But he does not handle complaints relating to the mis-selling of pensions - these must be made to the financial ombudsman.

However, consumers may find it difficult to prove that they were mis-sold a pension or any other long-term financial product if they were sold it more than six years before they realise that they have been given a bum deal.

The financial services ombudsman cannot investigate incidents that occurred more than six years prior to the date of the complaint.

The timeframe means that holders of life assurance policies or products such as endowment mortgage policies, which were popular in the late 1980s and early 1990s, fall outside the remit of the ombudsman's office.

The financial services ombudsman also cannot investigate disputes with unregulated firms, including sellers of overseas property, prompting the financial regulator to warn consumers on several occasions that they will have no comeback if the investment goes wrong.

Last year's report by the Auctioneering and Estate Agency Review Group recommended that a new regulator for auctioneers and estate agents should also cover overseas property vendors.

But this regulator is not expected to be up and running for several years, leaving people who buy overseas property now exposed if they encounter a dodgy deal.

Meanwhile, the call centre run by the National Consumer Agency (NCA) since January receives complaints about non-financial matters such as faulty mobile phones, domestic building services, faulty motor vehicles and the delivery (or non-delivery) of white goods and furniture.

The NCA has no power to force a company to change its behaviour or compensate consumers but it uses the call centre to identify trends in consumer dissatisfaction and then makes policy recommendations to the Government.

Consumers who make complaints to the financial services ombudsman can receive significant amounts of compensation.

Unlike the pensions ombudsman, who cannot compensate people for pain and suffering relating to the mishandling of their pension, Mr Meade has the power to make awards of up to €250,000.

His decisions are binding on both parties, but subject to appeal in the High Court.

Legal action is the last resort for any consumer who feels they have been mistreated, but an increase in the compensation limits available in the Small Claims Court to €2,000 will encourage consumers to pursue compensation using this route, according to the NCA.

Before the end of 2006, it is expected that consumers looking to pursue cases in the Small Claims Court will be able to process their claim over the internet, bringing satisfaction one step closer for consumers who feel hard done by in relation to matters such as holidays, professional services, cars, furniture, computers and electrical goods.

Information about the financial services ombudsman, including online complaints forms, is available at www.financialombudsman.ie or by phoning lo-call 1890 882090. The pensions ombudsman can be contacted at www.pensionsombudsman.ie or by phoning 01-6471650

Making your complaint count

DO:

Stay calm and polite. Explain your problem clearly, stick to the facts and state what you would like the firm to do to solve the problem.

Consider making a written complaint, especially if the problem has gone on for a long time or is complicated.

Supply your account or policy number and copies of any relevant documents, while keeping copies for yourself.

DON'T:

Exaggerate or make false claims.

Take legal action before you go through the internal complaints procedure and the ombudsman.

Be afraid to phone and ask for an update about the complaint.

Rush things: allow the company a reasonable amount of time to solve your complaint before you refer it to an ombudsman.

Source: The Irish Financial Services Regulatory Authority