Feeds

Rude financial firms to pay, Ombudsman vows

Distress grounds for additional compensation

Secure remote control for conventional and virtual desktops

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.

The essential guide to IT transformation

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?