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Edwina’s story
Edwina had a dispute with her bank about money withdrawn from her account after her card was stolen. Since the bank won’t help her, she complains to the Financial Ombudsman Service.
My problem
A few months ago I was out shopping in town when my handbag was stolen in the tube. I realised it was missing straight away, and got out of the tube to find a phone and contact the bank. I phoned them at 4.45pm.
When I got my statement a couple of weeks later, I saw there was a withdrawal of £400 on that date. Despite the shopping trip, I never spent that amount! I called the bank to tell them that the person who stole my bag must have withdrawn the money. They checked their records, and found out that the withdrawal was made at 5.30pm. I pointed out that I’d told them my bag was stolen at 4.45pm, but they said they hadn’t put a stop on the account till 6pm. They couldn’t tell me why.
I was furious. I said they’d have to repay me the money as it was their fault for being so slow. They said that I must have kept my PIN number with the card, or the thief couldn’t have withdrawn the money, so they refused to give me my money back. I said I didn’t keep my PIN with the card – I’m not that stupid. But they claimed there was nothing more they could do.
My options
I made a formal complaint to the bank in writing. I didn’t hear anything for seven weeks, and then I just got a brief letter saying they’d investigated my complaint, but didn’t agree they should reimburse me for the withdrawals. In small print at the bottom it said that if I was still dissatisfied, I could contact the Financial Ombudsman Service (FOS) with my complaint.
I suppose I could have taken them to court, but I thought that would cost quite a bit, and would take ages. It probably wasn’t worth it for £400. When I looked on the FOS website, it said it was free, and that most complaints were dealt with in six months, so I thought that would be worth trying.
The Financial Ombudsman Service (FOS) was set up by law to deal with complaints from consumers about banks, building societies, mortgage lenders, insurance companies, and other financial services providers regulated by the Financial Services Authority.
The FOS staff will tell you when you call whether or not they can take on the complaint. If they can’t, they will suggest what you should do next – you may need to give the company a proper chance to deal with the problem first, or it may be that the compensation you have already been offered seems reasonable to them.
If they can take on the complaint, FOS staff will ask you to send in written information about the problem, and will contact the company for their side of the story. They expect banks and other financial services providers to stick to the Financial Services Authority code of practice, and also to be ‘fair and reasonable’.
You can find more information on Financial Ombudsman Service
I phoned the FOS helpline on 0845 080 1800 and spoke to someone in the customer contact division. They said I had to complain to the bank and give them eight weeks to resolve the problem. I explained that I had already done that, and I had copies of the letters. I wasn’t happy with the bank’s answer, so I wanted the FOS to order the bank to give me my money back. I was told that they would investigate the problem, but that the FOS staff were impartial – I couldn’t expect them to be on my side. If I wasn’t happy with the FOS, I could still take the bank to court if I wanted to.
I downloaded the FOS complaints form from their website, and sent in all the information they asked for, including a copy of my letter to the bank, and their final reply.
What happened
I think the FOS got in touch with the bank next, because I didn’t hear anything for a bit. After three weeks I got a call from the FOS caseworker dealing with my complaint, who said that the bank’s records stated that the lost/stolen card report form had been completed at 5.45pm, so they claimed that must have been the time I reported it. I said I had definitely phoned at 4.45pm, which was before the withdrawal had been made. She said they would investigate further, and would keep me in touch with the progress of the case.
The outcome
The next week the FOS caseworker called back to report to me that the bank had been unable to provide a recording of the call to prove the time it was made, as the tapes had been destroyed. Apparently it’s good practice to keep tapes until any outstanding complaints have been sorted out, so the bank hadn’t done very well there.
The bank also couldn’t provide any evidence that I’d kept my PIN with my bank card. Apparently the Banking Code of Practice says that it is up to the bank to prove gross negligence, not for the customer to disprove it. I think the person who stole my bag must have been following me, and watched me key in my PIN number at one of the shops where I’d bought something.
Because the bank wouldn’t admit that they had made a mistake over the time, they wouldn’t negotiate with the FOS about paying me back.
If they think you have a case, the FOS staff will try to negotiate a settlement between you and the company involved. They call this ‘guided mediation’. FOS staff will tell you whether they think any offer is reasonable.
If the company refuses to make an offer, or if you’re not happy with the proposals, a member of the FOS staff will make an adjudication. This means that they will look at all the evidence from both sides, and at the relevant code of practice, make a decision about who is right, and make an order about what should be done to sort it out.
If you are not happy with the adjudication, you can ask for an ombudsman to look at the evidence again, and to make a formal ombudsman decision. There is no further appeal against that, but you can still take the company to court if you’re not happy.
As a result of their investigation, the FOS adjudicator ordered the bank to reimburse me for the £400 that had been withdrawn. I wondered how long they’d take to pay up, but in fact the money was back in my account within two weeks.
Banks and other services regulated by the Financial Services Authority are required to comply with FOS orders. If they don’t pay up, FOS orders can be enforced directly through the court. However, it is virtually unknown for financial services providers to fail to comply with a FOS decision.
May 22nd 2006
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