There has been a huge shift in the attitude of the banks towards consumer
complaints with the introduction of the new Code of Banking Practice and
the appointment of a new and more powerful independent Banking Adjudicator,
Bob Tucker, the chief executive of the Banking Council, says.
He was responding to the most recent annual report of the Banking
Ombudsman. The title of the ombudsman has subsequently been changed to
Banking Adjudicator.
In the report, covering the period May to December 1999, the Banking
Ombudsman took some banks to task for their ``dismissive`` attitudes towards
clients` complaints and their lack of co-operation with the ombudsman`s
office.
``We have on occasion experienced a reluctance on the part of some bank
officials, especially legal advisers, to react to complaints with
understanding and to co-operate with this office.
``Instead of putting right what was wrong or providing reason`s for the
bank`s belief that the complaint was unfounded, there has been a dismissive
attitude based on the merest technicality,`` the ombudsman said in the
report.
Tucker says it must be borne in mind that the report covered a period in
which the ombudsman had limited powers and banks were ``in learning mode``.
An important new framework has been put in place with the new banking code
and the new independent adjudicator.
Under the new rules, complaints received by the adjudicator are referred
back to the banks who have to try to resolve the problem within a period
stipulated by the adjudicator.
The adjudicator also makes rulings and recommendations. His rulings are
binding on the banks although the bank has the right of appeal to a panel
of three retired judges.
The adjudicator can also make recommendations on how bank should set
matters right. If the bank refuses, the adjudicator has the power to
publish the name of the bank.
The adjudicator did exercise this power recently and named First National
Bank for refusing to accept his recommendation that it partly compensate a
construction company for money lost due to fraud by its bookkeeper. The
bank paid out cheques from the company`s account in excess of the agreed
limits.
The new framework has also forced the banks to set up a single person or
channel to take up all complaints from the adjudicator`s office.
Under the old system, a bank could, for instance, have 20 people dealing
with the adjudicator. This meant that individuals at the banks could adopt
their own processes.
Unfortunately some of those people misunderstood the role of the ombudsman,
Tucker says. They thought he was a lawyer for the complainant and treated
him as such.
At the same time, he says, the lack of co-operation from banks that the
ombudsman referred to in his report was certainly not from all the banks,
nor even from all the staff at a particular bank.
The banks are now committed to adhering to the new code which they regard
as a encapsulating minimum service standards.
Tucker says it is ``a rational balance between the carrot and the stick that
does the trick. If banks really tried hard to do something they should be
complimented.``
The media plays a critical role and is important part of the stick being
held over the banks, he says.