Warning over bank charge complaints
The number of customer complaints about bank charges and financial hardship is on the rise.
The Financial Ombudsman Service has warned banks to treat such customers fairly and has written to the major current account providers about the issue.
It said it had received a growing number of complaints about the reclaiming of bank charges and due to the "volume and nature" of them it had been forced to take action.
Martin Lewis, creator of website MoneySavingExpert.com, said: "We've seen a raft of complaints about banks replying with generic letters, playing runaround, using delaying tactics and ignoring people in dire need. It's great to see the ombudsman stepping in to try to change this."
The news follows the Financial Services Authority's decision to grant a waiver for banks and building societies on dealing with complaints about unauthorised overdraft charges. It will remain in place until the results of a High Court test case are decided.
But under the terms of the waiver, banks still have to look into complaints about the charges if the customer is suffering genuine financial hardship, meaning they are unable to pay key bills such as council tax and utility bills, or they cannot meet essential living expenses, such as buying food.
However, the ombudsman service said it was seeing cases where banks appeared not to be engaging with these customers properly or they were failing to establish a clear understanding of their financial circumstances.
The service has also written to 20 claims management firms asking them to ensure they pass on the relevant financial information to banks when acting on behalf of a customer who they say is in financial hardship.