With effect from 1 February 2003, there are three significant changes to the time limits for making a complaint to the ombudsman service. In this edition of ombudsman news we outline the changes. Two of them affect all complaints referred to us; the third relates solely to mortgage endowment complaints.
The Financial Services Authority has issued several warnings to consumers about the risks associated with high-income bonds (sometimes known as "precipice" bonds). We are already dealing with complaints about the mis-selling of these bonds and in this edition we set out our approach to these disputes.
We look, too, at situations where a cheque has been intercepted in the post and paid in by a fraudster, using a false identity. In some circumstances we can deal with such cases, even though the person for whom the cheque was really intended is not a customer of the bank where the cheque was paid in. But the position is not always clear-cut and firms sometimes try to argue legal points why, in their view, we do not have the power to deal with a particular dispute.
Our selection of some of the banking cases we have dealt with recently includes two separate but similar complaints, each from a young man who visited a nightclub while abroad on holiday and then discovered a large number of transactions on his credit card that he could not remember making.
Disputes over customers' instructions to firms feature strongly in our investment-related case studies. Two of the cases involve instructions for a switch of funds (complicated in one of the disputes by the fact that the adviser had, quite improperly, asked the client to pre-sign a batch of blank forms, supposedly so that the firm could carry out any future instructions). In another complaint, a firm that was advising the trustees of a family trust ignored a written request not to take any risk with the trust's capital. And in a complaint involving a newly-separated couple who had a unit trust investment in joint names, the firm overlooked instructions from the wife to obtain two signatures before carrying out any transactions. Acting on the sole instructions of the husband, the firm then sold the entire investment and sent him the proceeds.
Finally, in an article about legal expenses insurance, we look at insurers' arrangements for handling claims under legal expenses policies. A recent High Court case highlighted some of the concerns that are sometimes raised about these arrangements. We summarise the factors we considered when reaching a decision on a recent legal expenses case and confirm our current thinking on this matter.
ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.
The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.