The Financial Ombudsman Service says firms need to stand behind promises made in marketing literature and treat complaints as legitimate in order to restore trust in financial services.
Speaking at fringe events at the recent Conservative and Labour party conferences in Birmingham and Manchester, FOS chief executive Natalie Ceeney (pictured) said the ombudsman service sees many cases where “glossy, beautiful promises were made in marketing literature that never translated into reality for the customer”.
She cited the example of Halifax failing to notify borrowers about increasing its standard variable rate cap from 2 per cent above Bank of England base rate to 3 per cent in October 2008. The lender said this was allowed in its terms and conditions, but agreed with the FSA to make a £500m goodwill payment to affected customers.
Ceeney said: “One of the reasons I believe financial services are struggling on the issue of trust is that their messages and promises were believed. If we are going to restore confidence, promises need to be kept and products need to deliver what they promise.”
She said the FOS does not see evidence of a “trying it on mentality” among consumers, and that businesses need to recognise most complaints are legitimate and justified. She said firms’ refusal to see complaints as legitimate continues to undermine trust.
Thameside Wealth director Tom Kean says: “Some firms will always find ways to rip people off. As for treating complaints as legitimate, most advisers have horror stories of ‘vexatious and frivolous’ complaints so that subject is a sore point for most of us on this side of the fence.”