Your rights when things go wrong

In some cases, this can be down to genuine human error. Maybe an email gets lost, or a callback request goes unanswered.

However, there will be times when poor service, delays or being sold an unsuitable product are too serious to be brushed off. But, if you want to make a formal financial complaint, how do you go about it?

First, complain to the organisation involved. Whether it’s your bank, insurer, pension firm or financial adviser, they should have a process for sorting out complaints.

You should hear from them with a final response to your complaint within eight weeks. If you’re unhappy with their reply or you don’t hear from them in time, you can take your complaint to the Financial Ombudsman Service (FOS).

The FOS will then investigate your case. If they decide the complainee has acted unfairly and you’ve lost out financially or suffered distress or inconvenience, they may award compensation. The maximum possible payout is £445,000 for complaints brought after 1 April this year, covering the previous six years.

This is a free service for consumers. You can pay someone to manage your complaint, such as a law firm or claims management company, but this is not necessary.

Third parties can take up to 30 per cent of any pay-out in fees, so it’s worth doing this yourself if you can. You are also protected if the company you bought your product or service from has gone out of business. All authorised and regulated financial companies pay into a central pot via a levy system which is managed by the Financial Services Compensation Scheme.

The amount of compensation depends on when the business failed and the kind of product involved. As a guide, the maximum compensation is up to £85,000 per person for banks or investments, or where the complainant has received poor pension advice.

However, change is on the cards. Generally, the financial complaints system works as it should. But there are concerns the FOS is too much like a regulator rather than a rapid dispute resolution service.

As a result, the UK Government wants to make sweeping changes to the way complaints are handled.

These include:

1. A different test to see whether a company has acted fairly and reasonably.

2. A system to refer cases to the financial regulator the Financial Conduct Authority where complaints are unclear, or where the same issue has affected a large number of people.

3. Barring complaints about an incident that happened more than ten years ago.

There are also separate plans to change the calculation for pay-outs to be less generous than the areat present.

Westminster is consulting on how these changes should work in practice. But, if you are unhappy with how a financial firm has treated you, it is well worth you trying to get the situation resolved, and starting the complaint process sooner rather than later is best.