Sloppy Service and Greedy Too

 Is the entire Financial Services sector ethically disconnected??

The behaviour of the banks has been widely reported but just recently three incidences of combined incompetence and /or greed from other areas in the financial services sector have come across my personal radar.

The first involves my pension provider. Somewhat ludicrous UK Government legislation brought about a change in which payments were to be made. The pensions company claim to have made a general announcement regarding the changes around two years ago but made no specific reference to the way it would affect me until 3 weeks before the change was due to be implemented. The impact was to reduce my potential income by almost half. No recommendations or alternative solutions were offered at the time. When pressed it seems the purchase of an annuity could ameliorate the issue to some degree.

What followed was a master class of mismanagement, wrong quotations, wrong forms, people claiming to be too busy, no one single point of contact, wrong interim payments and no response to a letter of complaint to the CEO. The upshot of all of this 3 months later is that the I am left to deal with the resultant tax implications and the pensions company receives a big fat commission cheque from the annuity provider. So it’s not just the banks who appear immune from the financial pain which incompetence and rotten customer service brings to other sectors. A request to the pensions company for a commission sacrifice is so far unanswered! The sector is quick to say they are highly regulated but that only covers legal process, not incompetence or an ethical conscience.

 Should financial service intermediaries be able to offer appalling service and still get paid commission from their supply chain?

The next instance is my home insurance. The renewal arrived from the broker at my current address showing the details of the property from which I had moved 3 years ago. On contacting them I was assured that had anything happened I would have been covered and that they would rectify the matter. A subsequent telephone call from them asked me again to reiterate all of the property details I had previously supplied. Another call informed me all was resolved and they had negotiated a discount for me. That appeared to be a step in the right customer care direction. When the revised renewal papers arrived the premium was in fact lower but no discount was mentioned just a standard calculation. Could this be due to the fact that my property had been wrongly rated in the past and that I had been overcharged for the previous two years since my move? It seems that was the case so what was presented as a customer service gesture of recompense turns out to be a scam to avoid paying back the overcharge of the previous two years.

 I wonder how many instances of dodgy ethics go on in the world what the total cost of undisclosed incompetence is to customers of the financial sector?

The third instance involves the administrators of a major UK electrical retail group that recently failed. The administrators organised a liquidation sale. The sale offered discounts of up to 30% but was criticised in the press as a “waste of time” and “not worth going”. One customer purchased a steam iron. The iron had been offered by the company prior to the liquidation for £49.99. The price direct from the international manufacturer is £65.00. In the sale the same product was priced at £119 – a 140% uplift!- customers were able to get a 20% discount on that price! The store manager confirmed that the administrators re-set the prices and at store level they no longer had any control. I contacted the administrators to offer them the opportunity to respond - no reply.

So it appears a major international audit, tax, consulting & corporate finance services organisation thinks nothing of ripping off customers.  Is the whole financial services sector living in a world where not only does it think it can behave as it wishes, but it actually can?

As customers have we a right to expect not only the highest standards of professionalism from such a vital sector  but also that they operate to an ethical standard which goes beyond their need to comply with the laws of the land in which they operate?

Are their leaders fit to lead?

Are the regulators up to the job?

Philip Forrest