NatWest Technical Glitch - Day Three

NatWest and its hapless customers are having to endure a third day of technical problems with its online banking services. The problems are also affecting RBS and Ulster Bank.

The BBC reports that approximately 1,000 NatWest branches opened early today to help customers who are still unable to access their accounts because of technical problems.

NatWest said:

"Unfortunately we are once again experiencing technical issues with our systems and account balances have not updated properly overnight. 

This means where money has gone into a customer's account, there may be a delay in it appearing on their balance.

We can assure our customers that this problem is strictly of a technical nature and we continue to work hard to resolve this."

The Financial Ombudsman has advised what customers' rights are:

• Anyone out of pocket owing to a technical or systems failure has certain rights
• Banks should put customers back into the position they were in had the problem not occurred
• That does not mean extra compensation is a right
• Anyone affected should let the bank know about their situation as soon as possible
• Customers should check to see if any payments due from an account have bounced
• They should also keep a record of how the problem has affected them - just in case a formal complaint is required later

My advice to NatWest is simple, turn the system off and then on again!

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Snouts In The Trough - Bogus PPI Claims

The Financial Ombudsman has, according to the BBC, stated that nearly 6,000 people submitted bogus compensation claims for mis-sold Payment Protection Insurance (PPI) on policies that they had never taken out.

The problem has been exacerbated by the activities of certain claims firms, who appear to be less than honest/ethical.

This rather proves the old saying "what goes around, comes around", as companies that unethically sold these useless policies are now on the receiving end of equally unethical treatment/practices.

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Lloyds Tops List of Shame

I see that, not content with topping the FOS's list of shame, Lloyds has also topped the list of shame published by the Financial Services Authority (FSA).

The FSA report that Lloyds received more than 280,000 complaints in the first six months of 2010.

Barclays received 259,266, and Santander 244,978.

Well done lads!

Lloyds are unapologetic, they claim that its their size that generates the volume of complaints and note that the complaints came from less than 1% of their 30 million customers.

So that's alright then!

The British Bankers' Association (BBA) also tried to weasel out of the criticism, the BBC quote them:

"The banking industry welcomes greater transparency but is concerned that the separate publication of complaints data by the Ombudsman and the regulator could lead to data overload. What should be a useful overall summary could become a complex and confusing exercise."

Pathetic!

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Well Done Lloyds!

Lloyds Banking Group, which is partly owned by the taxpayer, has achieved a new accolade by being on the receiving end of over 25% of new complaints received by the Financial Ombudsman Service (FOS).

The FT reports that in the first 6 months of 2010, the FOS received 84,000 new complaints, of which over 22,000 related to Lloyds and its subsidiaries.

Well done lads!

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Named and Shamed

The Financial Ombudsman Service (FOS) has finally had the guts to name and shame the worst offending financial services companies in the UK, being those companies that have logged the highest number of customer complaints.

Congratulations to the five major high street banks, which account for the majority of the complaints.

The big five have managed to notch up a staggering 38,286 complaints, out of a total of nearly 70,000 received by the ombudsman in the six months to 30 June 2009.

- Lloyds (which includes HBOS) came top to the league of shame with 15,233 complaints.

- The Royal Bank of Scotland group scored 5,533 of the complaints received by the ombudsman.

- Barclays scored 8,283.

- Abbey scored 2,493 complaints.

- HSBC group scored 2,363 complaints.

- Alliance & Leicester scored 1,786.

The chairman of the FOS, Sir Christopher Kelly, was more than unimpressed. He is quoted:

"I will now be writing to the chairmen of the financial businesses that generate the largest proportion of our complaints workload, to ask them to consider very carefully both their own complaints performance – as reflected in the data we are publishing today – and the complaints performance of their competitors."

As I have noted many times before, the financial services sector in the UK treats its customers appallingly.

Why does it use the word "services" in its moniker, given that "service" is the one thing that it doesn't provide?

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An Inequitable Life

Following on from the recent report by Ann Abraham, the parliamentary ombudsman, in which she called for compensation for more than a million policyholders in Equitable Life there are now concerns that more than half of them may in fact get no compensation at all.

The Equitable Members' Action Group (Emag) has estimated that the cost of compensation could be around £4.6BN.

Many thousands of Equitable savers have gone through the Financial Ombudsman Service (FOS) to claim compensation for mis-selling. However, only 50% to 60% received any.

Given this, and the fact that the Treasury will not respond to the report until the autumn, it is unlikely that all the policyholders are going to come out of this scandal with the result that they would wish for.

Emag has threatened a judicial review in autumn, if the government does not satisfy them.

This will be a long battle, by which time many of the policyholders may well have died.

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Record Number of Disputes

The Financial Ombudsman Service (FOS) has published its annual review for 2007/08, which shows that there has been a record number of enquiries and complaints about the quality of the financial services industry in Britain.

In the year ended 2008, the FOS handled a record 794,648 consumer enquiries and 123,089 new complaints (a 30% annual increase).

The number of mortgage and banking disputes tripled and insurance disputes doubled, whilst complaints about mortgage endowments fell by 70%.

The FOS settled 99,699 disputes.

Sir Christopher Kelly, chairman of the ombudsman service, said:

"This time last year we had hoped we were starting to see a downward trend in complaint numbers for the first time. But instead, events during the year have led to the ombudsman service receiving record numbers of new cases.

The sudden surges in banking and insurance disputes this year have meant that predicting, managing and dealing with complaint volumes has been more of a challenge for us organisationally than ever before."

Unsurprisingly there was a ten-fold increase in complaints about charges on current accounts, and a six-fold increase in complaints about payment protection insurance (PPI).

The rising number of complaints shows that the financial services industry in Britain has its work cut out if it is going to improve its image, reputation and quality.

The question is, does the financial services industry really care about quality or its reputation?

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Bank Fee Complaints Rocket

The Financial Ombudsman Service (FOS) has reported that there is something of a consumer rebellion, over current account fees, going on.

Last year banking complaints to the FOS rocketed by 47% to over 20,000. The FOS is now dealing with 1,000 complaints a week, from members of the public who are fed up with extra bank charges.

The FOS also receives around 3,000 enquiries a day about banking charges. Walter Merricks, the chief ombudsman, said:

"A year ago we were receiving just 10 cases a week about banking charges.

By the end of March 2007, this had risen to 500 a week, and we are now handling 1,000 of these cases weekly."

It would seem that the banks have some image and relationship building to do!

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A Portent of Doom?

The news that Jon Hunt, the owner of estate agency Foxtons, will sell Foxtons for around £370m to BC Partners a private equity group has caused a few worries in the housing market.

This signals to many that Hunt has, in effect, "called the market" and decided that now is a good time to get out of UK property.

Foxtons started trading in a converted Italian restaurant in Notting Hill 26 years ago, it now has 19 branches in London. Hunt will continue to work in the US market.

Last year, a BBC undercover documentary made a number of allegations about the firm. It claimed staff used faked documents to support inflated prices, put forward false offers to sellers, and made use of customer information passed on to them by Foxtons-owned mortgage broker Alexander Hall, which is also being bought by BC Partners.

Foxtons joined the industry's ombudsman scheme, an independent dispute resolution service which can award compensation, this year.

The sale of Foxtons UK business is subject to regulatory approval, which is expected within six weeks.

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5,000 Complaints A Day

The financial ombudsman is receiving up to 5,000 complaints a day from angry bank customers, in respect of high penalty charges.

It seems that, as the numbers of complaints are rocketing, there is something of a "customer revolt" over bank charges.

A year ago the Ombudsman received about 100 calls a day from the public over bank charges.

The FOS said the number of complaints it is receiving is unprecedented.

A spokesman said:

"It has even eclipsed mortgage endowment complaints. We usually get 200 to 250 of them a day, so it has well surpassed that."

Martin Lewis, financial pundit, said:

"The campaign to reclaim has been given huge impetus this week by the angry response of UK consumers to the enormous profits being reported day after day by Britain's banks, who are taking money unfairly from people's accounts.

This week it hit tipping point, as a whole new band of Britons grit their teeth to get their money back."

The banks are also waiting for the results of an investigation by the OFT on the issue of charges.

Earlier this week Barclays posted £7BN in profits, and analysts predict the "big five" alone will report more than £38BN in profits from last year.

Whilst the "consumer revolt" gathers momentum, those who manage to reclaim their charges should remember that banks are not charities. In the event that the banks are blocked from making money by levying charges for unauthorised overdrafts etc, the banks will find other methods of making money, such as abolishing free banking.

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