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Phone Home, Phone FOS June 4, 2013

Posted by Audit Monkey in The Joy & Pain of Internal Audit, The State of the British Nation, Working Life in Britain.
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Apologies for not blogging as frequently as I ought. However, one newspaper article has brought me out my slumber.

I was reading the Daily Telegraph’s ‘Your Money’ Section (1 June 2013) and an article entitled “Stand Up For Your Rights”. To cut a long story short, the article was about the fact more people (or consumers in Regulator speak) are making complaints to FOS, the Financial Ombudsman Service. For those of you blissfully unaware, if you have a complaint about a financial product and feel you’ve been short-changed, if the firm in question doesn’t resolve the complaint to your satisfaction or you are still dissatisfied, you can elect to take the complaint to FOS. FOS will review the complaint and decide whether you should be compensated or you are just having a whinge for the sake of it.

Not surprisingly, complaints about PPI made up 74% of the new insurance cases. However, the following caught my eye regarding bundled products. Many people (surely consumers?) are unhappy with the packaged accounts offered by many High Street Banks after discovering that the insurance deals included were unsuitable for their needs. The reason: many paid-for accounts included mobile phone insurance that did not cover the phone aboard. Ms Ceeney, the Chief Ombudsman, said “Inevitably there will be a bit of a cleanup as customers realise that what they had been paying for wasn’t very useful to them – some of it is as bad as the PPI mis-selling”.

Several points. One, when was mobile phone insurance ever travel insurance? Do you really think if you take your Ipod, Ipad, Iphone, Samsung Galaxy III aboard and have it pinched that it would be covered under a UK domestic policy? No, I don’t. Customers are just being naive or plain dumb.

Two, ‘it’s a bad as mis-selling’. Really, the Regulator has known about the issues around bundled products; this isn’t fresh news, i.e. who the ultimate Insurer was and the need for full product disclosure.

Third, to make out ‘it’s as bad as PPI mis-selling’ is bonkers. The whole ‘refer a complaint to FOS’ is becoming an industry in itself. If brash statements like this are made, I’m not surprised that 7,000 complaints are received each day and another 1,000 people will be hired to deal with the complaints as the Ombudsman seems to be proactively encouraging consumers to complain. What are happened to buyer beware? Are we really treating all customers as morons who can not decide for themselves whether a policy or product is suitable? To my mind there has to be a rethink on whether consumers are being compensated for their own stupidity.

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Comments»

1. ITauditSecurity - June 7, 2013

Gov’ts have been doing that for years, at least in the US. The idea is that we are too stupid (or lazy) to think for ourselves. It is self-perpetuating. No one is accountable any more.

Then the more we rely on the gov’t, the more they own us. That’s the point, isn’t it?

On the other hand, can everyone take care of themselves? I think about my mom, who is gullible. So some laws and organizations need to exist, but certainly not to the extent they do today. Some younger folks need to learn by losing.


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