Alliance and leicester fined by FOS for retaliatory account closure

[BankFodder]

The Ombudsman has just adudicated in a complaint against the A&L on a complaint that they closed a customer account in response to a claim for bank charges.

 

The FOS decided that the closure was indeed unfair as it was punitve and retaliatory.

The awarded £125 against the bank.

 

this is a derisory figure of course but the ruling is highly significant.

 

If you have had your accont closed by any bank because you have cliamed bank charges - or if you have been threatened with account closure then we suggest that you begin an immeiate complaint to the Ombudsman.

 

You will have to get a final decision from your bank first.

 

The more complaints which are made, the more likely the banks are to stop this vindictive and churlish treatment of their customers.

[itsamomentintime]

bankfodder

 

thanks for the info

 

can you provide a link to the info with regards to the ruling, so we can have a looksee?

[elsinore]

Can't see anything on the FOS website, itsa, they seem not to publish individual rulings. Maybe BF got it from the complainant.

 

However, there is an interesting letter from the FOS's Jane Hingston to the Independent(?) Banking Codes Review. Draw your own conclusions!

 

news and information

 

Elsinore

[BankFodder]

I have a copy of the decision. The complainant will himself be putting up a thread in the next few days and the press have just been informed.

 

I suggest that anyone wishing to complain do so immediately - even if one threats have been made.

 

Once people get to know about this there may be a bit of a rush and a backlog may develop.

 

Unfortunately you will have to exhaust the bank's procedures first so it is all timeconsuming.

Still, make the complaint anyway. It creates additioanl pressure and additional awareness - and of course if there is £125 going then it is better in your pockets than in theirs - but you know that, don't you!!

[bally35]

I am so glad that the FOS are finally coming under pressure to pull banks up on this matter.

Clearly in breach of FSA regulations regarding "treating customers fairly".

I think I will be including the ruling in all futute correspondence with the banks that I am dealing with!!!!!

[Bookworm]

If you have had your accont closed by any bank because you have cliamed bank charges - or if you have been threatened with account closure then we suggest that you begin an immeiate complaint to the Ombudsman.

 

You will have to get a final decision from your bank first.

.

 

Isn't that a contradiction in terms?

 

Regardless, and even though they haven't closed the account so far, I have plenty of evidence against Halifax that they use the threat to try and dissuade people, so that's going to get done ASAP.

 

Thanks for that information, BF. ;-)

[Guest Tracey284]

Great to see this and am anxious to learn more. HSBC have threatened to close my husband's account and asked for all cheque books, etc. back by mid Feb. This was in answer to us claiming back bank charges. Any direction would be greatly appreciated in complaining to the ombudsman.

[Bookworm]

Great to see this and am anxious to learn more. HSBC have threatened to close my husband's account and asked for all cheque books, etc. back by mid Feb. This was in answer to us claiming back bank charges. Any direction would be greatly appreciated in complaining to the ombudsman.

 

http://www.consumeractiongroup.co.uk/forum/campaign/43287-financial-ombudsman-recommendation.html?highlight=ombudsman

[wez1211]

Dear Forum,

 

The Financial Ombudsman has awarded me £125 compensation as a result of the treatment I received from Alliance & Leicester when they forcibly closed my account after I sued them.

 

It was not the Adjudicators place to comment on the merits of the original action but nevertheless I was entitled to bring as is my legal right under consumer protection legislation and common law. Consequently Alliance & Leicester are not treating their customers fairly by deliberately deterring such actions with the threat of account closure.

 

I quote verbatim,

 

"He should not be prevented from bringing a legitimate complaint by the threat of having his account closed; nor do I consider it fair or reasonable of Alliance & Leicester to respond to his complaint about charges by closing the account. Alliance & Leicester appears to me to have used the closure of the account as a retaliatory or punitive measure".

 

Suffice to say that this decision was far more satisfying than the £200 I claimed back for bank charges back in June 2006.

 

The key thing to remember is that you have to exhaust the complaints procedure with the firm first of all before you refer to the FOS. You must obtain a 'Final Decision Letter' from the firm that states they cannot do anymore with the complaint and that if you remain disatisfied you can refer the matter to the Financial Ombudsman within 6 months - this is crucial.

 

The FSA rulebook defines what a 'FDL' is and so it must contain these magic words in order for your complaint to be heard by the FOS.

 

Good Luck and all the best

 

Wez1211.

[jellybabe]

Hi there,

just stumbled across this thread.I recently asked First direct to refund charges, which they, after a lot of secure messaging back and forth, at last have done.ut their last message to me was following:

Message From Bank

-----------------------------------------------

Operator ID : xxxxxx

Date : 04/01/2007

Subject : Account Management (debt Management)

 

Dear jellybabe

 

I'm sorry you've felt the need to write to smile about the charges applied to your account and about the time it's taken to reply to you.

 

After reviewing your complaint a refund of the charges applied to your account has been agreed. As such, a total of £140.00 has now been returned as a gesture of goodwill.

 

I have also adjusted the charges that you will receive notification of on 05/01/07. Please ignore this notification as the charges will not debit your account. Could I please bring to your attention that we will not refund any further charges unless there has been a bank error. Any further requests for a refund (unless bank error) may result in us giving you 30 days notification to close your account.

 

At this stage we are required to let you know that smile will regard the complaint as closed if we do not receive a reply within 8 weeks of this response.

 

If you remain unhappy you may ask for your complaint to be referred to the Financial Ombudsman Service. Full details are on our website, Redirecting to Smile Production Site / talk to us / complaints.

 

Yours sincerely,

 

Jane Cliff

smile Customer Services Manager

well, now i just been informed that they try to charge me another £30 in unauthorised O/D charges, because it took them a week to put the money back into my account, and by then ,of course, the new statement date has passed.

Any advice on what i could do? I don't want them to close my account as i have £500 O/D and won't be able to pay it all back in one go.

Thanks in advance for any advice given.

[jellybabe]

oops, sorry, smile was the one, not First direct, that was another one of mine.:o :o

[livelylad]

just subscribing.

[thecornflake]

Much thanks for posting this excellent news. This is a great victory, and I am quite surprised that the ombudsman actaully made a decent decision.

[fergal71]

hi can we do the same to egg, they have settled bank charges full refund but have closed , credit account... now paying back balance monthly?????

[mcuth]

I'm gobsmacked - what a ruling.

 

Excellent victory - time I complained about them closing my account too then

 

Cheers

 

Michael

[debt_mountain]

Complaint now on its way to Nationwide with copies of the required letters. It really does pay to send everything recorded and only deal by letter...

 

Lets see what happens.

[HSBCrusher]

Originally Posted by BankFodder

If you have had your accont closed by any bank because you have cliamed bank charges - or if you have been threatened with account closure then we suggest that you begin an immeiate complaint to the Ombudsman.

 

You will have to get a final decision from your bank first.

.

Isn't that a contradiction in terms?

 

Regardless, and even though they haven't closed the account so far, I have plenty of evidence against Halifax that they use the threat to try and dissuade people, so that's going to get done ASAP.

 

Thanks for that information, BF. ;-)

That's the 8 week thing, (put the complaint in writing blah blah, wait for 8 weeks to hear nothing or be fobbed off) the ombudsman are very meticulous about this as i found out recently. I was even asked by the ombudsman to send a letter telling them the 8 weeks had expired.

HSBC closed my account.

This is truly great news.

[dave]

Well, that's fantastic.

 

If anyone fancies a laugh, they could read this:

 

BBC NEWS | Business | Bank bars overdraft charge rebels

 

Well, that backfired a little, didn't it? ;-)

[Joa]

Lloyds has sent me a closure letter in July, then changed their mind after I spoke with my account manager. Then, in December, after settling my second claim, they have cloed my account, with balance transfered towards my personal loan, without notification, without my agreement or even a courtesy note. I am furious and wrote:

I find it exceptionally disappointing. It is an implied term of the contract between the firm and its customer that the firm will not normally close the customer’s account without giving reasonable notice. The Banking Code says that, in normal circumstances, firms should give customers at least 30 calendar days’ notice before closing their accounts.

 

You have not given me such notice and a previous notice has been rescinded by the Bank.

 

Your decision has caused me great anxiety and inconvenience. The FOS is likely to require the firm to pay compensation .(FSO News, issue 48, August 2005 “banking: when a firm decides to close a customer's account”).

Additionally, around the times of the above mentioned correspondence, the account was in dispute and I have issued a legal action, twice, against your Bank with regards to unlawful penalty charges. The Bank has settled on both occasions. After the first settlement you have threatened with me an account closure but after I spoke to one of your regional managers, we agreed to keep the account open in order to service the personal loan account. After the second settlement you have not even informed me that you have decided to settle my claim in full and you have closed my account. I have checked my account by complete coincidence and realised that you have refunded the money. I was lucky to check as the very next day (or even on the same day; I cannot check anymore because you have not even send me the final statement)- you have closed my account.

 

I could therefore argue that you have closed my account as a malicious, disproportionate reaction to my “penalty charges” complaint.

You have acted against an advice of your own professional body;

The Banking Code Standards Board .

You may want to note that the Ombudsman has just adjudicated in a complaint against the Alliance & Leicester on a complaint that the A&L closed a customer’s account in response to a claim for bank charges.

The FOS decided that the closure was indeed unfair as it was punitive and retaliatory. The FOS awarded £125 against the bank.

 

I am confident I would be able to convince the Ombudsman that I have been affected in a similar way by your decision.

I now request that you issue me with a 'Final Decision Letter' as I intend to take me complaint to the Financial Ombudsman.

[MARTIN3030]

Yes I also asked for some clarification on this and got this reply from Emma Parker of the FOS.;

 

"We can and do look at complaints about difficulties in opening bank

accounts - just as we look at complaints about banks closing accounts.

Often these complaints involve other aspects and issues too - for

example, where the consumer has financial difficulties, and problems

have arisen in the relationship between the bank and the customer over

a

period of time. This is why we have to look at each case on an

individual basis, to see whether and how we can help given the

particular circumstances.

 

In the first instance we tell consumers to give the bank or building

society an opportunity to investigate the complaint and sort out the

problem. If this doesn't work - or you're not sure who to get in touch

with at the bank - you can contact us free for help on what to do next."

[Will Scarlet]

Fantastic News - this is a great step forward and should be quoted / complained about at every opportunity. It is truly wrong that banks can use account closure as a threat and I am grateful to the FOS for taking such positive action. The more official complaints about bank account closures the banks receive and, in turn, are forwarded to the FOS once FDL's are received, the more pressured the regulators will be to make precedent setting decisions and rulings. Don't let up the pressure!

[itsamomentintime]

wez1211 - i wanted to let you know that you are a legend as far as i am concerned - congratulations on the ruling!

[reigate]

Well thats very encouraging I was wondering what I would do without any credit cards or bank accounts as I have just started this process. I will try to start a thread (if someone explains what to do ) to monitor my progress.

[joneshousehold]

Well done Wez1211 - good complaint, even better result

[trubster]

Hi, My OH had an account with A&L, and paypal took money out of her account by direct debit instead of her credit card, she was charged a huge sum of money and was on benefits at the time, she lost £80 that was paid into the account from the jobcentre.

 

She argued for 1 month and they closed her account and cleared the balance, her credit file shows a zero balance with no default.

 

Is it still worth complaining and do you think she will get the £80 back and would the account be re-opened?

 

Thanks

 

Kev