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Consumer&#39s View

It is difficult to imagine what goes on in some financial services

companies or how they expect to remain in business, given the appalling

state of their administration. Computerisation which ought to make

administration more efficient seems to have had no discernable effect on


When confronted with details of cases where things have gone badly wrong,

in at least 50 per cent of instances the press office fails to either

investigate or to come back with an explanation.

Three weeks ago, I rang the customer helpline for my annual travel

insurance policy which I knew expired at the end of April. The policy is

sold by Portman Building Society and is good value for money.

I was told that I would be sent a renewal notice. Three weeks later and

now up against the expiry date, I had still heard nothing. When I called

again, there was no explanation of why I had not been sent my renewal


Ann, who dealt with my enquiry, clearly had all my details on a computer

screen in front of her. Did it not indicate whether or not I had been sent

a renewal notice and, if not, why not?

I was assured that a renewal notice would be sent forthwith but I am not

at all confident that it will arrive.

Administrative errors probably constitute the largest number of complaints

received by financial journalists. Last week, my postbag contained one of

the many letters I receive regularly complaining about Standard Life.

More in sorrow than in anger, Mr MJ Taylor of Orpington in Kent complained

that he had been waiting since January to be allowed to take advantage of

Standard Life&#39s Freestyle mortgage facility to borrow extra on his flexible

loan. The details made horrific reading but would come as no surprise to

anyone who has dealings with Standard Life.

I asked the press office to investigate but it took four phone calls and

two days to get an answer. This is par for the course and better than many

life companies which never bother to call back.

But if Mr Taylor himself rang up, which no doubt he did, presumably

Standard Life would have to deal with his complaint. So why can&#39t the

press office get an answer more or less straight away? When it did get

back to me, surprise, surprise, his complaint had been dealt with – the

same day.

Some of the worst offenders are the biggest and newest companies which,

one imagines, ought to have modern computer systems.

Hardly a week goes past without someone writing to complain about

administrative errors at Egg.

If anyone at Egg is reading this article, Miss AJ Blake would desperately

like some more deposit envelopes so that she can invest some more money

with you. She has been waiting since March 29 and has probably given up by


“Is the only recourse to withdraw my account?” she asks but I do not

suppose anyone will reply because she has already written twice and


So widespread are the problems that administrative error is also the

biggest category of complaints to the various ombudsmen. On more than on

occasion, the ombudsmen themselves have had to complain of failure to

respond to their investigations.

The situation is serious not least of all because if a financial services

company cannot deal simply with administration, how confident can we be

that it is calculating our mortgage payments correctly, valuing our unit

trusts at the right price, applying our monthly savings accurately and on

time, or paying out the right amount when we cash in a savings product?

Perhaps the answer is for the new Financial Services Ombudsman to announce

a tough policy of hefty fines on companies that regularly make mistakes and

fail to deal with the inevitable complaints.


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