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ombudsman approach to complaints about TESSAs - guidelines issued today for banks and building societies

26 September 2000

The banking and building societies ombudsmen today jointly issued guidelines, setting out their approach to resolving disputes between consumers and their bank or building society about interest rates and exit penalties on variable-rate TESSAs (tax-exempt special savings accounts). This follows a significant increase in enquiries about the topic.

The purpose of today's guidelines is to clarify the general principles that the ombudsmen are likely to apply in resolving complaints about TESSAs, in cases where consumers remain dissatisfied after getting to the end of their bank or building society's complaints procedure.

Having a closer understanding of how the ombudsmen are likely to deal with these complaints should help banks and building societies adopt a similar approach, leading to greater consistency, more effective complaints-handling and - in many cases - problems being anticipated and resolved before they become complaints.

notes for editors

  1. The role of the banking and building societies ombudsman schemes is to resolve individual disputes between consumers and their banks or building societies. Ombudsmen do not carry out regulatory functions - they have no power to require banks or building societies to correct cases unless a customer complains.
  2. Where the ombudsmen uphold individual complaints, they can award compensation for financial loss or inconvenience. But they cannot impose general fines or penalties where rules, codes or guidance are broken.
  3. TESSAs (tax exempt special savings accounts) were first introduced in 1991. The accounts could be opened at banks or building societies up until 1999, when ISAs (individual savings accounts) were introduced.
  4. The banking and building societies ombudsman schemes are coming together with six other complaints-handling schemes to form a new unified organisation - the Financial Ombudsman Service. This new single organisation is being set up by law under the Financial Services and Markets Act. It will provide a single port of call for consumers with personal finance complaints ranging from motor insurance and pension plans to mortgages and stocks and shares.

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