Interest Rate Action 1 of 3 – Complain

Creditor Complaints Procedures and FOS

We have got so used to being told what to do by big companies, and have placed so much trust in them that it comes as a shock when we find their feet are of clay. Similar to the day we realised our parents do not know all the answers to everything!
So realising that the credit offering companies are more concerned with their profits and bonuses than with our needs is a bit of a culture shift. Alright I exaggerate a bit – but not as much as you might at first think.
The question then is what to do about it.
We have more power than you might think in this. And that power is in complaint. Not at the pub across a pint of beer, or in bed at night to our partners.
To be effective complaint has to be focused and clearly thought through. So let us start with the companies’ own complaints procedures.
We start there because it may be that we can get a quick result, and save the further effort. But don’t count on it!
There is a second reason. Only after we have completed that procedure can we take the issue to the Financial Ombudsman Service (FOS); and this latter is worth doing.
If you are being charged an interest rate that is higher than 18% a year on a credit card [that is 1.5% a month] or than 9% for a term loan, or 18% on direct mail you do, in my opinion, have cause for complaint about that interest rate.
Even those cut off points are high rates to me, but we have to find points that are not themselves going to be cause of argument. Anything above these levels while Bank Rate is below 6% is usurious, and therefore immoral in the terms accepted by three major western religions for thousands of years.
Somewhere on your statement should be information about the complaints procedure of that company. It is a requirement for all members of the Banking Code and even non-members are expected to conform by the FOS.
The main points to get across about any sharp upward change in your rate at any time recently is that it is unfair and unreasonable. ‘Unfair’ is an important term in the Consumer Protection Regulations 2008 and the test of reasonableness is basic to British law.
You will need to make sure you put both the old and new interest rates in and point out that Bank Rate has not increased by even one percent in the period and therefore there is no case for this force majeure change to the rate charged to you. In part you should remember this letter will form part of what the FOS will work from so it needs clear information in it.
Send this letter off and wait for the answer. You should get an acknowledgment and usually about eight weeks later a final response.
If the final response does not reduce your rate to a sensible figure you send a formal complaint to the Financial Ombudsman Service. This will take a long time because the service is terribly overloaded already. But wait patiently and you should get a positive response. The FOS has the power to force the creditor to change the rate and/or make the company pay compensation.
Get the appropriate forms from the FOS website.
A lot of such complaints will encourage the FOS to raise the matter with the regulators.
See also the next two blogs I am preparing Interest Rate Action 2 of 3 – Complain which deals with contacting the Office of Fair Trading and Interest Rate Action 3 of 3 – Complain Which deals with the Financial Services Authority.

Joseph Harris
Debt Control Man

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One Response to “Interest Rate Action 1 of 3 – Complain”

  1. Credit Crunch » Interest Rate Action 1 of 3 - Complain Says:

    […] darashaselig wrote an interesting post today onHere’s a quick excerptCreditor Complaints Procedures and FOS We have got so used to being told what to do by big companies, and have placed so much trust in them that it comes as a shock when we find their feet are of clay. Similar to the day we realised our parents do not know all the answers to everything! So realising that the credit offering companies are more concerned with their profits and bonuses than with our needs is a bit of a culture shift. Alright I exaggerate a bit – but not as much as you might at first think. The question then is what to do about it. We have more power than you might think in this. And that power is in complaint. Not at the pub across a pint of beer, or in bed at night to our partners. To be effective complaint has to be focused and clearly thought through. So […] […]

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