Bradford & Bingley refuse to deal with claims handlers!

Endowment complaint handlers have accused Bradford & Bingley of flouting regulatory guidelines and breaching the Human Rights Act following the bank's move not to deal with mis-selling cases brought by third party firms.

Bradford & Bingley wrote to endowment complaint handlers to inform them that from August 1 it "will not enter into any further dealings with them in respect of complaints". It intends to write directly to clients informing them that they can complain themselves for free and provide them with information on how to do so.

The B&B letter informed that its position was "wholly consistent with the spirit of [the Financial Services Authority's guidelines] Treating Customers Fairly and complies with its regulatory obligations".

The decision by the B&B goes a step further than the one made by Prudential in April. The Pru declared that it would no longer pay redress to third parties; instead compensation would be paid directly to the customer. But unlike B&B, the Pru is still happy to correspond and deal with the third party while considering the complaint.

Complaint handlers, however, argue that people have a right to choose how they make an appeal. The correspondence sent out by B&B has, understandably, provoked a determined response from them. Several have accused the bank of breaching an FSA guideline that states: "A complaint may be brought on behalf of an eligible complainant… by a person authorised by the eligible complainant or authorised by law." They believe this is a desperate ploy by Bradford & Bingley to disenfranchise customers and avoid paying compensation where endowment policies were wrongly sold.

A spokesperson for Complaint handlers stated, "It is very unusual for the accused to be judge and jury. It's clear that a large proportion of providers do not treat customers fairly. A Mori survey shows that one in four people do not believe they will be treated fairly, that's why people choose to be represented by firms like ourselves." A number of providers, including Abbey, have received hefty fines from the FSA for failing to investigate endowment complaints properly.

Overall, many endowment complaint handlers acknowledge this act as an attempt to intimidate customers from approaching endowment specialist organisations. They insist they operate a highly responsible and effective service to endowment victims and strongly oppose any suggestion to the contrary.

B&B insists it is not flouting the rules and says that it informed the FSA of its actions. It maintains its actions do not violate FSA regulations because it has said that it will deal with third parties, if a customer insists on such action (a point it omitted to mention in the letters sent to complaint handlers last week).

B&B has made it absolutely clear that it has no time for the complaint-handling firms, claiming that they slow down the complaints procedure and people have no better chance of winning a case via this route.

The regulator has just sent letters to the chief executives of various banks and insurers urging them to maintain acceptable standards on this issue.

Complaint handlers, on the other hand, believe the bank is being condescending to customers who wish to hire a complaint handler. They firmly believe, "People know their options, they have seen the FSA leaflets, understand what they are paying for and sign up accordingly. Yet B&B are challenging their decision. It's arrogant, patronising and frustrating."

The FSA says that people should think carefully about the likely costs and benefits of using complaint handlers. An FSA spokesperson confirms that if the B&B move had been a "blanket refusal to deal with third parties," then it would be in breach of its rules.

Aug 10, 2005
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