Some lenders are telling borrowers that it will take longer to respond to affordability complaints asking for refunds because of Coronavirus.
You have a right to send a complaint to the Financial Ombudsman (FOS) after 8 weeks if the lender has not given you a Final Response.
But should you let the lender have a few weeks extra? Most businesses are having some Coronavirus problems, so would that be fair?
One lender asks for an extra 8 weeks
This email has been sent to a lot of customers with affordability complaints.
This is in reference to your recent complaint registered with us and currently under investigation. Please note that due to the challenging situations associated with COVID-19, we are experiencing delays in complaint handling. As a result, to thoroughly investigate your complaint and provide an appropriate final response we anticipate requiring an additional 8 weeks from the due date of your original complaint. We will try and respond sooner if possible. Both the FCA and FOS are aware of these changes to our deadline handling.
One reader commented:
They have worded it to try and imply that the FOS have somehow agreed to it, in reality they mean they are flouting the rules and FOS know that they are. It’s like saying you have started stealing from your local shop and that both the shop owner and the police are aware of the changes to your food supply process.
Why you should probably go to FOS at 8 weeks
1) Your complaint may have to go to the Ombudsman in the end
Too many high cost lenders often reject or make poor offers to affordability complaints. For example, in the last half of 2019, complaints against Lending Stream were won by the customer in 80% of cases.
If lenders made better decisions, in-line with those the Ombudsman will make, you could feel more relaxed about allowing the lender more time.
But if you are going to have to send your complaint to the Ombudsman anyway, it’s good to do this as soon as possible. That is at the 8 week point. Waiting longer will delay your end result.
2) It shouldn’t ever have taken 8 weeks to reply!
Many lenders seem to have designed their complaints process to be as slow as possible and only to respond in the 8th week. Before that complaints sit in a pile, unread.
If a lender had organised its complaints department to usually reply within the first few weeks, it would not now be having problems with the 8 week deadline if Coronavirus slowed things down a bit.
Some lenders have even made things deliberately difficult for borrowers by not allowing them to complain by email, by sending unpleasant questionnaires or by insisting on sending final responses by letter even when they have been asked to reply by email.
Customers who feel they have been treated well may be more inclined to allow a lender more time.
3) No sympathy if a borrower asks for a speedy response
A customer who asks for faster complaint handling as they are in difficulty doesn’t get much sympathy from most lenders:
- if you ask for a rapid response, you are told the rules give them 8 weeks;
- if you ask for a FOS adjudicator decision to be accepted quickly, you are usually ignored;
- after a refund is agreed, if you ask for a fast payout you are told the lender is allowed to take 28 days.
So why should you allow a lender more time?