Feeds

Rude financial firms to pay, Ombudsman vows

Distress grounds for additional compensation

Application security programs and practises

Delays, rudeness and poor claims handling are grounds for ordering financial services firms to compensate customers, the Financial Ombudsman Service (FOS) has said. Payments can be ordered in addition to other remedies.

Whenever a customer complaint is upheld by the FOS, it will consider whether to make an additional award for distress and inconvenience caused by the firm – even if the consumer has not specifically asked it to do so.

In exceptional cases, it may award compensation even if the complaint is not upheld but the firm handled the complaint particularly badly.

The FOS explains its approach to such claims in a technical paper that was updated last month. Unlike a court, which can only award damages for distress and inconvenience where the purpose of a contract was to provide pleasure, relaxation or peace of mind, the FOS decides each case on what is fair and reasonable in the circumstances.

"We usually consider it fair that a financial business which has caused material distress or inconvenience or other non-financial loss should be required to pay reasonable compensation for that", the paper states.

Awards range from less than £300 for relatively minor inconvenience, such as repeatedly getting an address wrong, to over £1,000 in exceptional cases, such as disclosing a consumer's address to her violent, estranged partner.

Mid-range examples include causing distress to a widow by repeatedly addressing letters to her deceased husband about the life insurance claim, and failing to provide alternative accommodation so a family had to live in their property for a month without essential facilities. In each of these cases, the additional compensation was between £300 and £1,000.

The paper confirms that this type of award will only be made if the business has itself caused the distress or inconvenience through some error or failure. Insurance claims, for instance, are often made in difficult circumstances following a death or accident, but this is not something for which the insurer can be blamed.

Nor will the FOS award compensation where the degree of inconvenience or distress appears to be trivial.

"Usually, the question of awarding compensation only arises after a business, or its appointed agent, has breached a duty or been responsible for maladministration in its dealings with the consumer," states the paper. "'Maladministration' might include delays, clerical or procedural errors, rudeness, incorrect or inadequate explanations or simply a failure to respond to the consumer's reasonable requests."

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Mobile application security vulnerability report

More from The Register

next story
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.