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Standing up for the small guy

8th November 2007
Page 40
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Page 40, 8th November 2007 — Standing up for the small guy
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Which of the following most accurately describes the problem?

Truck buyers faced with dealers or finance firms trying to wriggle out of an agreement can get free help from the Financial Ombudsman.

Adam Bernstein explains how.

New trucks are covered by warranties, and the dealers which sell them must be registered with the Financial Service Authority before they can offer any financial products From April this year the offer of a hire purchase agreement also comes under the scope of the FSA,offering greater protection to operators buying vehicles on credit.

If you have a dispute over a vehicle's warranty or finance agreement you can call on the help of the Financial Ombudsman Services (FOS), which is there to help consumers and businesses with a turnover under Lim. The independent FOS considers complaints about financial products. It doesn't give advice; it doesn't make the rules; nor will it fine companies who break them. It simply arbitrates — and its services are paid for through a levy on the finance businesses and case fees so fees are not charged to those who complain.

The FOS is empowered to deal with disputes over subjects such as banking, insurance, pensions, savings, investments, credit cards, loans, hire purchase, stocks and shares as well as financial advice. And since 6 April 2007 the FOS has also been briefed to look at complaints involving consumer credit transactions That means the FOS now covers businesses whose main activity is lending and hiring; other activities such as debt collection and credit brokerage; and firms where offering credit is a secondary activity—such as CV dealerships.

These businesses are now required to have an in-house complaints handling procedure, just like other financial products companies. The idea is to resolve complaints before they escalate. Failure to operate a complaints handling procedure, irrespective of the product or the type of customer (personal or business), could involve penalties.

Consistent treatment

The FOS requires every financial services company to have a policy in place to ensure consistent and fair treatment of all complaints; as well as offering and honouring redress if a complaint is upheld and the redress is accepted. The redress might be financial, an offer to correct a credit record or something as simple as an apology.

The FOS will only consider a case once the business concerned has had a chance to deal with the complaint. If the matter cannot be resolved amicably, the complainant can make a formal complaint— there is no need to take legal advice. But before any complaint can be progressed through the Ombudsman, it has to pass various tests, such as whether the selling business and product is covered by the FOS; whether the complaint is covered; the relationship between the complainant and the business; and when the problem arose.

Time limits are important. When a complaint is made the complainant should receive a written acknowledgement as soon as possible: the business must keep the complainant informed of the progress of the complaint and must issue a final response within eight weeks of the initial complaint.This letter must tell the complainant that if they do not agree with the decision they can go to the FOS within six months of the date of the final response. Complainants can also lodge a complaint up to six years after the event The eight-week response time limit can be extended in 'exceptional circumstances'. Here the business needs to explain the situation to the complainant, mentioning the availability of the FOS and including a copy of the FOS's leaflet.

The process is non-binding, so the complainant doesn't have to accept the ruling of the FOS and can still decide to pursue a claim through the courts. Once the decision has been accepted it becomes binding on all sides, but no precedents are set — one case won't determine the outcome of subsequent or similar cases.

Most complaints will be resolved within a year and a third in under three months.

Fair and reasonable The FOS will consider cases from complainants who are based overseas. The issue is the location of the selling business; not the country of residence or nationality of the complainant.

After checking the eligibility of the complaint the FOS looks to see what is 'fair and reasonable' in the circumstances.The appropriate laws and codes of practice applicable at the time of the complaint will be taken into account.

In terms of awards, the FOS can order a payment up to £.100,000 for any loss, pain and suffering, damaged reputation, distress and inconvenience. On rare occasions costs can be awarded. And once the ruling is accepted it can be enforced through the courts. • CONTACT

www.financia I-ombudsman org. uk

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