Feeds

Rude financial firms to pay, Ombudsman vows

Distress grounds for additional compensation

High performance access to file storage

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.

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.