I’VE a great idea for politicians hoping to score a hit with voters at any forthcoming election. In your manifesto, propose a proper consumer champion – a no-nonsense figurehead who will be listened to and respected by banks, credit card companies and other financial institutions.
I probably think about this idea at least once a week, or whenever I hear of some unwary individual being ripped off, crushed underfoot by a bank or summarily dismissed by the ever-prevailing ‘computer-says-no’ attitude which features in so many financial undertakings these days.
However, my notion has been given fresh legs by the news that there has been a surge of more than 40 per cent in complaints about fraud and financial scams the past 12 months. Who says so? The Financial Ombudsman Service, which resolves cases when consumers and financial firms can’t agree.
In the last year alone, complaints rose by 14 per cent to a total of 388,392 and are now at their highest level in five years. If this isn’t justification enough, I don’t know what is.
PPI remains the highest area of dispute, with a total of more than two million complaints recorded. However, problems with payday loans escalated by a staggering 130 per cent. And reports about fraud and scams increased by 43 per cent, with 12,195 complaints received, a record annual total.
Authorised push payment (APP) fraud – where a person is tricked into transferring money directly to a fraudster – is reported to be one of the fastest-growing types of fraud.
As I know from personal experience, it is ridiculously easy to fall victim to this kind of heist. Clicking just one link on a perfectly legitimate-looking email can have disastrous consequences.
And whilst I would always argue that it is up to us to teach ourselves about the threats out there – I averted potential catastrophe because I’m paranoid about online security – this is not always an easy thing to do.
For various reasons, there are many people whose grasp of sophisticated technology is shaky to say the least. Become prey to a fraudster, however, and your bank or credit card provider is not always obliged to step in and help by refunding lost funds.
This seems to me to highlight the very dangerous dichotomy at the heart of our relationship with financial institutions – and it needs addressing.
While banks are keen to force us to conduct as much business as possible online and by using apps – in place of old-fashioned human contact – they aren’t keeping to their side of the technology bargain.
In particular, as the Ombudsman highlights, the banks are not getting a handle on the impact their own IT failures have on consumers; millions of customers were locked out of their accounts last year because bank systems failed.
I think we all know the consequences of this – missed direct debits, payments stalling, salaries lost in cyber-space and the rest. And that’s just normal everyday banking, not the complexity of fraud-related issues.
“People manage their money in a variety of ways, and fraud and scams are becoming ever more sophisticated,” points out Caroline Wayman, the Chief Ombudsman. It’s her job to remain impartial. And while it is important to have a final recourse for grievances, she must also remain largely below the radar in order to carry out her remit.
In addition, her public role is strictly informative, not reforming or educational. That’s another reason why we need a champion. I’m not talking about some token celebrity or TV personality who gets a buzz out of ‘rescuing’ other people from their problems. I think we’ve had quite enough of that kind of thing, thank you very much.
Their first job would be to conduct a root and branch review of the way that consumers are treated by organisations which they should trust. They won’t have to look far to find case studies. I’d like to see their findings taken up by the relevant select committee and debated in the House of Commons.
I’d also like to see them spearhead a sea-change in the general political attitude towards issues of personal finance. The work that many individual MPs have done, amongst them Barnsley Central’s Dan Jarvis, to highlight and tackle the scandal of payday loans companies, is admirable.
Politicians need to realise that it is not only the most vulnerable in society who are at the mercy of financial institutions and their arbitrary treatment of customers – it is every single one of us.
Huge net-worth private companies – which make their profits from ordinary people – are stepped around with the utmost of delicacy, whilst the rest of us are hung out to dry. It’s time that they were held to account because, too often, they hold us to ransom. Names on a postcard then please.