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ombudsman news

issue 6

June 2001

procedures

towards N2

The March 2001 issue of ombudsman news outlined the modifications we are making to our complaint-handling process, in readiness for N2. We've made a start at making some of those changes already - so that, by 1 December, the transition should be reasonably seamless for everyone.

our new computer system

Our new computerised case-handling system - "Croesus" - has now been rolled out and the banking and loans division transferred to this system towards the end of May.

It was no easy task to devise a common computer system which would fully support the handling of cases under the new Financial Ombudsman Service rules - while allowing all the existing schemes to operate under their old rules. We felt that where there were differences of practice and procedure which weren't rule-based, we'd try to bring them together as we launched Croesus. This would mean there'd be less for firms to have to get used to when N2 arrives.

In this, we were very much mirroring what the Banking Code Standards Board has been saying over the past few months - that well ahead of N2, firms should start changing their in-house complaints-handling procedures to meet the requirements of the Financial Services Authority.

A key change to our procedures occurs where a customer telephones us about a complaint that has not yet reached deadlock. If the customer agrees, we record the details and pass them to the firm for attention. There have been the inevitable minor teething problems but initial feedback about the impact Croesus has had on firms has been very helpful. We have made some immediate changes to improve how we do things, but we hope firms will keep their comments coming.

firms' final response letters

The changes we're making will be more than matched by the changes across the industry as a whole. So, at a time when firms are reviewing the way in which they deal with complaints, it's perhaps timely to mention a few points about firms' final response letters - what some are used to calling "deadlock" letters.

These letters usually comply with the basic requirements of saying that the complaint has reached the end of the in-house complaints procedure, and providing information about referring the complaint to the relevant ombudsman scheme. But more often than we would like, the letters do little more. It can be very unhelpful to a customer, and frustrating for us, if we have to seek out a sequence of correspondence to get the whole picture. There are times when we don't get the whole picture until much later on - and we then find that the complaint, or the firm's response, has been misunderstood and it could all have been sorted out much earlier. So, here's an extract from our recently published briefing for banks and building societies.

Whatever else the complainants show us, they must show us your final response (or "deadlock") letter. So it is in your interests for the final response letter to set out your position clearly. It is helpful to include:

  • an apology or expression of regret - whether the complaint is justified or not, you have an unhappy customer
  • a summary of the complaint
  • a summary of the outcome of your investigation on whether you acknowledge that there has been some fault on your part n any offer you have made to settle the complaint n how long that offer will remain open
  • if appropriate, why you consider the complaint is outside our rules - but explain that it is for us, not you, to decide this
  • a clear statement that the letter is a final response and that, if the customer is dissatisfied with the final response, he or she may refer the complaint:
    - before N2 [ in the case of a bank], to the Banking Ombudsman Scheme within 6 months
    - before N2 [in the case of a building society], to the Building Societies Ombudsman Scheme
    - after N2, to the Financial Ombudsman Service within 6 months.

Remember - the final response letter should be written in clear, plain language. If possible, it should stand alone. Avoid referring to previous correspondence which may not be readily available to the customer or to us. If you have to refer to previous correspondence, attach a copy.

If you haven't got a copy of our briefing and would like one, contact our technical advice desk:
phone 020 7964 1400
email technical.advice@financial-ombudsman.org.uk

training

Jointly with the British Bankers' Association and the Building Societies Association, between March and late June this year we ran five workshops up and down the country. These were designed for firms to come and find out what the new regime will mean to them - in relation both to their internal complaints-handling procedures and to those complaints that reach us. In total, almost 120 complaints-handling staff from over 70 firms attended the workshops.

We saw this as a particularly important exercise and devoted significant resources to the workshops. The two industry associations ably supported our workshop presentation team - David Millington and Sue Wrigley (ombudsmen), Alison Hoyland (consumer and parliamentary liaison) and Nik Shah of our technical advice desk.

A large number of the delegates provided feedback and they consistently rated the workshops very highly. So we're even more confident than we were before that firms have taken on board the significance of the changes that they will shortly face.

firms' job titles

Many firms are expanding their in-house complaints teams and creating new roles - some with new job titles. We actively discourage firms from using "ombudsman" as part of a job title. It confuses customers about the dividing line between what the firm does and what the ombudsman does. We even had to dissuade one firm from calling someone its "ombudsman manager", which would have given quite the wrong idea about how things work.

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.