The Financial Ombudsman service was established by the UK Parliament to resolve issues between financial companies and consumers. It’s a free service that aims to negotiate a settlement between parties. Although they don’t have any legal powers to enforce fines, they do apply the rules of the regulator who has the powers to. The cases cover a broad range of financial issues, from pawnbroking to pensions and bonds to banking. One of the biggest issues in recent times is the mis-selling of payment protection insurance (PPI).
In the last few years, complaints to the UK Financial Ombudsman have increased fourfold. In 2009 they considered 127,000 cases, and in 2014 this leapt to 512,000. It’s saddening to think that we have so many un-resolved issues between consumers and the financial services industry. The sales culture they have bred emphasises the on-boarding of users over the closure experience of a service – the ultimate delivery of the service. This is surfaced when the customer becomes unsatisfied with the service delivery and calls the Financial Ombudsman to resolve the issue. The closure experience for these customers should have given the peace of mind that many financial products promise in the advert, but a common experience is that the T&Cs dictate otherwise.
According to the Financial Ombudsman, many of the complaints they receive arise through misunderstanding and are quickly resolved through ‘clear explanation of what has happened and why’. This highlights the issue with T&Cs and their impenetrable nature. T&Cs are the clearest and most factual version of a closure experiences the provider can imagine. Sadly, it is written in such a way as to make it totally alien to the customer. We see this in how ridiculously un-user centric they are, by their length and by their complexity.
Fairer Finance found that only 27 per cent of people read the T&Cs of financial services products (2,000 surveyed). Of those who read them, only 17% understood them. They also found that the length of the documents put many people off, which isn’t surprising given that HSBC, the worst offender in banking comes in at 34,000 words, 5,000 longer than John Steinbeck’s Of Mice and Men. The worst for the insurance industry is Endsleigh’s at 37,676 – longer than Heart of Darkness by Joseph Conrad.
With 512,000 disputes outstanding with the Financial Ombudsman we can see the customer is stranded between a compelling advert and sales-based culture on one hand, and the impenetrable T&Cs and poorly thought through closure experience on the other. A fresh user-centric approach, focusing on Closure Experiences that fulfil delivery of a service’s promise is what we should be aiming for. In turn, we’d be reducing the Financial Ombudsman’s workload to something less embarrassing for a world-leading service industry.