Lousy service? Then go on, give 'em hell

If Your bank screws up or your insurer won't pay up then complain, and do not stop complaining until you get what you want or the relevant ombudsman rules that you have been treated fairly (and even then you do not have to let the matter rest).

A worryingly high proportion of people who make complaints against financial companies give up too easily and are dissatisfied with the outcome, according to a survey in this month's Which? magazine.

If a customer's complaint is not resolved by the company at the first attempt, a third of complainers just give up, the survey found. Even among those who stand their ground, three-quarters subsequently give up rather than go on to one of the many free ombudsman or other arbitration schemes now available.

Financial companies are probably getting away with shoddy service and products to an even greater degree than is suggested, given that the survey was among 2,000 Which? readers who said they had complained to a financial company. These people are likely to be more inclined than average to push their complaints.

The magazine, which is published by the Consumers' Association, says it is disappointing that so few complaints are taken on to the ombudsman schemes. These are specifically designed to sort out customer complaints, are free to the complainant, can make awards of up to pounds 100,000, and in most cases do not affect your right to take the matter to the courts if you remain dissatisfied. Last year, for example, 2,000 policyholders benefited by taking their complaints to the Insurance Ombudsman (note that before going to the ombudsman you must first reach deadlock with the company). The Ombudsman required insurers to pay out a total of pounds 10m, an average of pounds 5,000 to each successful complainant and as much as pounds 270,000 in one case.

Which? blames the dearth of complaints being taken this far in part on financial companies' failure to publicise the ombudsmen adequately. The magazine says a third of people say they have never heard of them.

But customers also need to be more assertive. Which? found that one in five people did not bother to complain, rising to nearly half when they were dissatisfied with a financial adviser. These people felt there was little point in complaining; instead they simply took their business elsewhere, even though by complaining they might have got compensation.

The Co-operative Bank is unusual in automatically crediting pounds 10 to its customers' accounts when the bank screws up on a number of services, but other banks and financial companies are known to make one-off compensation offers. Even the threat of taking a complaint to the ombudsman can be enough to trigger compensation, perhaps because companies pay the costs of complaints.

Which? found that current accounts and mortgages generated the most complaints. With current accounts these typically took the form of mistakes; with mortgages they tended to be about misleading advice.

Only half of those complaints that were resolved by a company left the customer satisfied, the survey found. The resolution of complaints about insurance policies and mortgages were most likely to leave customers dissatisfied - in each case more than three-quarters were dissatisfied.

Part of the reason was the time taken to put things right. Almost a third of complaints were resolved within a fortnight and most were resolved within two months. But half of those surveyed still thought this was too long and most who went on to an ombudsman are unlikely to have been impressed with the speed at which their claim was handled. Final resolution can easily take months.

The survey results contrast strongly with the claims of financial companies about customer care. Of the four organisations that cropped up in the Which? survey regularly enough for conclusions to be drawn on their performance (Barclays, Halifax, Lloyds and NatWest), Lloyds stood out as being the most efficient.

Which? offers a number of tips on how to complain. These include:

q Keep copies of all letters and requested documents.

q Make a record of any phone calls, noting the date, time and name of the person you spoke to and what was said.

q State clearly in letters that you want your letter to be treated as a complaint and, if possible, detail what you feel the company should do.

q If you are asking for compensation, justify the amount.

q Ask for the company to tell you by what date it intends to act.

q If the matter remains unresolved or you have not heard anything within two weeks, write again and refer your complaint to a higher level.

q If the company makes you an offer in "full and final settlement", remember that if you accept it you are unlikely to be able to ask for more.

q If you reach deadlock at the highest level of a company's complaints procedure, consider taking your case to the relevant ombudsman or arbitration scheme. The company should be able to tell you by which scheme it is covered.

q With the ombudsman, give details of what you think the company should do. Include details of any expenses or distress suffered as some ombudsmen will not make awards for these unless you ask.