ANYONE who has ever been a customer of a financial services company will know that their lives can be blighted by the incompetent and sometimes sharp dealings of the finance industry. Those left seething by an unfair credit-card penalty charge, a mis-sold pension or endowment mortgage policy will want justice.

Where there is blame there is a claim, but it will take more than just an angry telephone call to get the compensation that you deserve.

Times Money looks at how to claim for compensation.

Make your case

Instead of picking up the telephone to complain, focus on the hard facts of the case.

You might think that what has happened is self-explanatory, but to be successful in proving your argument you will need documentary evidence and a clear account of events, including the people that you spoke with at the company and the dates when problems occurred.

Before taking a case to the Financial Ombudsman Service (FOS), you should exhaust the company’s internal complaints procedure. Gather all relevant documentation, such as copies of bank statements, information on investments or insurance policies, and outline your case in writing.

The FOS advises customers to make clear what they want, whether it be a refund or compensation. The FOS says: “Call the company and find out where you should send the complaint to. When you write, set out your case on one page of A4, outlining the main strands of your complaint. Any additional evidence should be included on separate sheets. Keep a record of all subsequent letters and telephone conversations.”

The Financial Ombudsman Service

If a company is unwilling to accept that it is in the wrong after looking at the case for two months, a customer can then take the claim to the FOS, which offers a free service that enables people to complain against all registered businesses. A formal complaint can be lodged with an adviser by calling the helpline number 0845 0801800.

The FOS sends a complaint form to all applicants, which must be signed and returned with copies of any relevant documentation. Copies of complaint forms can also be found on the FOS website, www. financial-ombudsman.org.uk.

If the FOS decides that there is a legitimate grievance, it will write to the person making the complaint, explaining that an official investigation has been launched. The FOS investigates about 100,000 cases a year. Typically, an adviser will try to mediate an agreement between the customer and the company, based upon a compensation offer that it judges to be reasonable.The FOS has the power to force a company into a settlement, but consumers can still take the case to the courts if they are dissatisfied with the outcome, although this route can be expensive.

Most claims lodged with the FOS take between six and nine months to be resolved, with between 30 per cent and 40 per cent of all judgments favouring the consumer.

The Financial Services Compensation Scheme

Anyone affected when a rogue company appears to have disappeared or fallen into insolvency can call the consumer helpline of the Financial Services Authority, the City watchdog, on 0845 6061234, and ask it to trace the business.

If you find the business is no longer trading, you can make a claim with the Financial Services Compensation Scheme (FSCS) by calling its customer service department on 020-7892 7300. An adviser will record details of the case and send an application form.

For a claim to be eligible, it will have to relate to financial losses that occurred after August 28, 1988, when the fund first came into existence under its former title, the Investors Compensation Scheme. The FSCS typically takes six months to complete an investigation before any offer of compensation is made.

Credit

Legislation designed to update the UK’s 30-year-old credit laws was shelved by the Government this week because of pressures on parliamentary time in the run-up to the General Election. Banks, lenders and consumer groups reacted angrily to the decision not to push ahead with the Bill, designed to give consumers new rights to challenge extortionate lending terms. When the new laws do come into force, the FOS will oversee complaints made against loan and credit card companies.