How to protect yourself

Dealing with banks is one of those things most of us would rather put off, but sometimes you just can’t avoid it.

Whether it’s your current account, savings or mortgage, banks are a fact of life, and the services they provide are essential. If only they were clear and easy to understand too. Most of the time, they aren’t, so we’ve put together these little guides to help guide you through.

Survive a visit to the bank

Remember that while customer service advisors and cashiers are there to help with your query or issue, they’ll often try to sell other products and services too. So be aware of this if you go to your bank just for a simple thing like paying in a cheque or withdrawing cash.

And remember, you can always walk away if you’re unhappy with anything.

We all shop around to get the best price on all sorts of things, so why should it be any different with banks? If you’re visiting your bank to find out about a new product or service, such as a savings account or current account, then these tips will help you to get a good deal:

1. Be clear what you need - Decide what it is you’re looking for and how you want to use the account. If you’re looking for a savings account, for example, do you want to operate it by phone, internet or in a branch?

2. Do your homework – Find out what the best deals are before you go to your bank. Then you can challenge them to beat the best offer you’ve found. Which? Best Buys are a good place to start, and with many finacial products, you can check them for free.

3. Ask a friend - If you’re not confident around financial products, take someone with you to the bank for guidance. A friend or partner may think of questions that you forget to ask.

4. Ask for more details - For example, make sure you’re clear about current account interest rates and overdraft fees, or penalties for withdrawing your savings early. You’re the one in control, the bank wants your custom – if they can’t offer exactly what you want, go elsewhere.

5. Get it in writing - Ask for confirmation in writing of any special deal or offer before you sign.

6. Take your time - If your bank offers you an extra product or service, ask for details that you can take away with you to consider in your own time. Don’t be pressurised into signing up while you’re there. Remember, banks don’t always want what’s best for you, but want to boost their profits.

7. Question everything - Don’t automatically believe bank staff if they say you can only have a certain product if you also take out another one at the same time. This was a classic way that banks used to sell PPI attached to personal loans.

8. Walk away - If you feel you’re being pressurised into picking a particular product or if the customer service is poor, walk out. You can also complain to tell the bank’s management why you’re unhappy so they can take action to improve their service.

Make a complaint that gets noticed

Making any kind of complaint can seem like a hassle, but it’s important that you do if you think you’ve been treated badly. And you won’t be alone – in the first half of 2009, there were over 1,000,000 complaints made against financial providers.

Financial complaints in 4 steps

1. Talk to the bank – Give your bank the chance to put the matter right first. Make a note of who you speak to and what’s said. If you feel that you’re getting nowhere, you could warn them that you’ll take your business elsewhere.

2. Put it in writing – If your bank doesn’t help it’s time to put in a formal complaint. Write a letter heading it ‘Complaint’ and be succinct but include essential information – dates, names of people spoken to say how you would like the matter to be resolved.

3. Take your grievance further -  If you don’t hear from your financial provider within 4 weeks or if they haven’t resolved your complaint within 8 weeks, you can go to the Financial Ombudsman Service (FOS). You can also go to FOS before 8 weeks are up if your bank sends you a final ‘deadlock’ letter which means they refuse to negotiate with you any longer.

   FOS handles complaints about most bank accounts, investment products, mortgages, loans, pension products, insurance policies, credit and store cards, HP agreements, financial advice.

   Complaints are handled free of charge and forms can be downloaded from the FOS website, or you can call 0300 123 9123. You should explain and document your complaint fully saying how you would like the issue resolved.

   FOS will try to resolve the dispute with further discussions between you and your financial provider. If that doesn’t work, it starts to get a bit complicated, but don’t give up - 59% of the complaints FOS received in the first half of 2009 went in favour of the consumer. Next, an adjudicator will issue a formal decision, but either side can appeal against this. If that happens FOS will make a decision which can only be appealed against by you, not the provider. So if you win, you’ll be awarded a sum that aims to put you back in your original financial position.

4. Go to court – If you’re not satisfied with the FOS decision, you can take it to court, but this can be costly so it’s best to get legal advice on whether it’s sensible or not. If your claim is for more than £5,000 in England and Wales, £2,000 in Northern Ireland or £3,000 in Scotland, you’ll have to go through the civil courts so your expenses will be significantly higher. If you lose, you may also have to pay the other side’s costs.

   For lower claims, court costs aren’t so high, and you don’t have to have a solicitor. These cases are heard as a small claim, except in Scotland, where they’re heard at the Sheriff’s Court.