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Guide to solving Tessa complaints

The banking and building society ombudsmen have come up with guidance to help consumers, banks and building societies resolve the growing number of complaints about Tessas.

The guidance is for people who think they have been shortchanged on their variable-interest Tessa account.

The ombudsmen have been inundated with enquiries about the tax-free accounts in recent weeks.

The ombudsmen will decide who is eligible for compensation on the basis of their answers to twoquestions.

A “yes” answer to either question means that the investor does not qualify for a payout.

The first question is:Did the bank or building society pay a fair rate ofinterest on the Tessa?

The second question is: If the bank or building society did not pay a fair rate of interest on the Tessa, did it tell the investor by May 5, 1999 that the Tessa could be moved freely?

A fair rate of interest is defined as comparable with the interest rates on other accounts in the bank or society&#39s range.

Any compensation awar-ded will be calculated from interest lost plus an “appropriate amount” for inconvenience caused.

The ombudsmen&#39s approach is based on its interpretation of the law, the principles of the banking code and good industry practice.

Financial Ombudsman Service head of communications David Cresswell says: “Having a closer understanding of how the ombudsmen are likely to deal with these complaints should help banks and building societies adopt a similar approach.

“This will lead to grea-ter consistency, more eff-ective complaints handling and, in many cases, prob-lems being anticipated and resolved before they bec-ome complaints.”

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