Barclays told to pay £17k redress after risk error
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The FOS has told Barclays to pay out £17,192 to a cautious client it placed in a high-risk fund.
The bank has apologised for its handling of the complaint after rejecting two previous adjudicators’ rulings.
The sum awarded by the FOS was more than double what Barclays originally offered the client in redress.
In April 2007, a Barclays saleswoman advised Sue Murton to invest £52,000 in the Aviva global balanced income fund, which it reclassified as an adventurous fund three months later.
Murton says she told Barclays she was a cautious investor and was not notified of the change to the risk rating.
Murton says by March 2009 her investment had fallen in value to just £21,000.
She complained to Barclays and in May 2009 the bank offered her £8,374 in compensation. Murton rejected the offer and referred the case to the FOS.
In September 2009 and November 2009, two separate FOS adjudicators found in favour of Murton but Barclays rejected both decisions.
In May this year, an Ombudsman upheld the case in a final, binding decision and awarded redress of £17,192.
Murton says: “It is appalling that Barclays treats its customers this way.”
A Barclays spokesman says: “We would like to apologise to Mrs Murton for the time it has taken to resolve her complaint.”
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Readers' comments (8)
Evan Owen | 1 Jul 2010 8:58 am
If this was an IFA, a network for example, the FSA would have ordered it to appoint an 'expert' thingy, KPMG for example.
This is not a simple matter of 'risk error' and if the FSA can't supervise the banks adequately after 25 years what chance is there later on?
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Martyn Sinclair | 1 Jul 2010 9:28 am
Evan, you are being a little too "cautious" here. If it had been an IFA the FSA would probably have ordered some costs to themselves. From previous cases, £17,000 to the client - probably a fine of £170,000 to errm, I wonder who..............oh yes the FSA for failing something or other. This must be a classic case of fine churning - needs regulating you know!!!!
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Anonymous | 1 Jul 2010 9:35 am
The way the market is polarising through higher capital adequacy ratios and more onerous administration, I fear that more independent IFA's will leaving the industry, pushing more customers to the likes of Barclays. Result. More miss selling, which will only multiply the number of claims as detailed above. What stinks even more is that Barclays will continue to contest these type of claims on the basis that a) they can b) assume customer ignorance or capitulation and c) the lack of statistical evidence to show just how many claims Barclays have currently outstanding as a proportion of business written.
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Julian Stevens | 1 Jul 2010 10:52 am
This is just one of hundreds of such complaints, perhaps many hundreds. Were the culprits members of a network, the FSA would have come crashing down on them and the network like a hundred tons of hot bricks, with fines as well for poor complaint handling procedures.
But, as these missales were perpetrated by a bank, instead the FOS adjudicators are reported to have been given "special training". Just what sort of special training? Training to be more or less rigorous in their handling of each referred case? What was different about these cases from any others of a similar nature? The only difference, as far as I can see, is that they were perpetrated on a mass scale and Barclays either fobbed off complaints or made derisory offers of compensation, both of which the FSA claims to take a very dim view of. Except, of course, when the culprit is a bank rather than an IFA firm.
All this does is provide yet more evidence that the FSA is biased in favour of the banks.
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Peter Heffernan | 1 Jul 2010 11:59 am
I think that if ever I have an adjudication found against me or my company by the FOS, I'll do the same as Barclays and "reject the decision"!!! Amazing what you can do when your a rich bank.
Perhaps its just me but I honestly thought that the FOS was there to decide on such cases as presented and their findings were final, I'm pretty sure they would be for all IFAs or brokers.
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Anonymous | 1 Jul 2010 2:00 pm
Hopefully she stayed invested in the fund, it went up by 28% this year!
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mick mullarkey | 1 Jul 2010 3:31 pm
Peter
All firms are able to reject the adjudicators decision if they so wish. It is then referred to an Ombudsman for a final decision - which is then binding on all parties.
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Mark Smith | 1 Jul 2010 9:32 pm
This is not an isolated incident, I have a client who has had his complaint for the same product upheld by the FOS and Barclays have rejected it. The complaint has been ongoing for 11 months and no end in sight, absolutely disgusted at the way they treat their customers.
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