Banks need to do more to help struggling customers

It has been claimed by the Financial Ombudsman Service that banks in the UK need to take more action to help consumers that are in dire straits with their finances and who need help to keep them afloat financially.

It has emerged that many banks are routinely turning customers away when they are approached for financial assistance, and the FOS said that the banks really need to take the time to check whether the customer is suffering genuine hardship before refusing to help them.

It has emerged that every month thousands of people who go to their banks for financial assistance are getting turned away, and in many cases these refusals refer to customers that have gone to their banks to ask for leniency because they are suffering so badly with their finances.

This has resulted in the number of cases and complaints being referred to the Financial Ombudsman Service going up. Many of these cases involved customers who had fared badly during the recession, and who were finding it difficult to even afford essentials such as paying bills and buying food.

Some of these customers have been to their banks asking them to increase their overdraft, reduce interest rates, or take other action that could ease their financial problems.

However, in many cases banks have refused to look at the financial situations of these customers, and some have even been found to be advising customers to go to debt management agencies, despite the fact that this was not necessary in some cases.

The Financial Ombudsman Service stated: ‘Banks are just not doing enough to establish whether the customer is suffering genuine hardship before they reject a case. They should act sympathetically and positively, but in more cases than not this isn’t happening. In all cases, a lack of funds has pushed a consumer in to a position which we define as hardship.’

Tags: Financial Services Authority, debt management, turned away, customer, financial assistance, Financial Ombudsman Service, bank