The Financial Conduct Authority [FCA] recently tweeted, “@TheFCA: We also don’t believe it’s fair for banks, insurers, lenders etc. to profit from people making a complaint #costlycalls”. We agree and so, it appears, do other organisations who lobby on behalf of consumers. In the summer of this year Richard Lloyd, executive director at Which? said in an article in The Telegraph, “It is unbelievable that companies would add insult to injury by charging their customers a premium to make a complaint. It’s even worse when they offer new customers access to 0800 numbers while leaving loyal customers to pay more.” Tweets are fine, but it is action that is needed. The history of financial service regulation shows that financial service companies are reluctant to take the lead on such issues, unless a regulator forces them to change their behaviour.
Long calls are costly and unfair!
A review of 5 major banks shows that the use of 0845 number is still commonplace with alternative numbers, when and where available, being shown in a low profile position. So what do these numbers cost? The Ofcom website includes a downloadable ‘telephone numbering guide’ which shows that 0845 calls are typically charged at between 1p and 11p per minute depending on the time of day for landline customers, and often include a call set-up fee of up to 14p. Calls from mobile phones generally cost between 14p and 41p per minute. Anyone who has made a complaint to a financial service organisation knows how long a call can take, often simply listening to ‘hold music’! The does not seem to fit in with the principle that regulated firms should treat customers fairly.
There are, of course, outliers (in a positive way) such as HSBC who state on their website complaint page that the quickest way to contact them is via a 0800 number (free to call from a land line and will be soon from a mobile telephone too).
What is needed now?
A government press release announcing the implementation programme for the Consumer Rights Directive [CRD] issued on 13 December 2013 was titled “Customers calling helplines to complain will no longer have to pay more than the basic rate putting a stop to costly calls” and in it Consumer Minister Jo Swinson stated, “It really is unfair that consumers are being stung in this way. For too long, some businesses have been trying to extract every extra penny from their loyal customers.” Sadly, the CRD doesn’t cover every sector. Public bodies and financial companies are outside its scope. While the FCA has shown its intent in the recent tweet the official line remains that the FCA is committed to considering whether it could introduce similar measures for those calling banks, insurance companies and investment brokers.
In our view, financial institutions should come into line!
In our view a consumer telephoning a financial institution to complain about a financial product deserves the same protection as any other consumer with a compliant and there is no reason why financial institutions should not come into line with other consumer facing businesses.