Banks reported to watchdog over misleading consumers
According to recent reports two major UK banks have been reported to city watchdogs by the Financial Ombudsman Service for treating customers unfairly over bank charge complaints, as well as for misleading customers through information – or lack of information – provided.
 The Financial Ombudsman Service reported the two banks, which have not been named but are thought to be amongst the top five major UK banks – after receiving a number of consumer complaints.
According to the FOS the banks in question have been breaking FSA regulations by failing to provide consumers with information with regards to their right to complain to the FOS. Customers that complain to banks are supposed to be informed in writing that they have the right to take the matter to the Financial Ombudsman Service, and FOS officials are concerned that some banks are ignoring the rules and regulation in the light of record account charge complaints.
One spokesperson for the FOS stated: 'We have contacted the Financial Services Authority about a couple of banks we are aware of that are breaking the FSA rules.'
The majority of the complaints that have raised concern with FOS officials relate to penalty charges and the way that consumers are being treated after raising the issue of penalty charges, such as having their accounts closed by the banks.
Officials from the Financial Ombudsman Service also added: 'In the case of account closures, some banks have led consumers to believe that it is not something they can take to the ombudsman service - but it is.'
In the meantime UK banks continue to wait for further information from financial regulators with regards to placing ceiling limits on penalty charges that are applied to customer accounts. This follows last years ceiling limit placement on credit card charges, which has already been enforced.
Tom Smith
9th March 2007
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