Many lenders, Uncle Buck Finance LLP included, are currently receiving communications direct from the Financial Ombudsman Service (FOS) concerning complaints that have not been raised with the relevant lender first.

Here at Uncle Buck we would like to think that if a customer complains to us, we take their complaint very seriously and devote a lot of resource to investigating the facts of the case before deciding on what we think is a fair and appropriate response to make to the customer.

Evidence goes both ways and it is perhaps a disappointing indictment of the environment for short term lending that phone calls are recorded and consumer credit agreements are now very lengthy.

The proper process laid down in DISP is that the customer should first raise their complaint with the business and expect to receive a prompt acknowledgement followed by a final response within 8 weeks. If they are not satisfied with this response, they may then approach the FOS for adjudication, or possibly transfer to an Ombudsman for a decision.

Without this, the FOS have no knowledge of the lender’s side of the case, and as the phrase goes “there are two sides to every story”. At Uncle Buck we would hope our customers do not have cause to complain, but we know some will, whether we have inadvertently given them cause to do so or not.

We struggle to see how preliminary decisions made by the FOS can be fair without all the facts to hand and question whether this is a good use of resources, in particular, how redress can be suggested without considering the balance of information.

New legislation

It is also difficult to fairly apply today’s standards to yesterday’s loans (well, maybe not yesterday’s but a little farther back in time). The OFT’s Irresponsible Lending Guidance was issued in 2010 and many parts of it came into effect in 2011 along with the EU CCD. The cross trade association Good Practice Customer Charter was implemented in November 2012. The transfer of supervisory body from the OFT to the FCA came in April 2014 with the two rollover limit, and the two unsuccessful CPA limit, on 1 July 2014.

Short term lenders are now required to offer only price cap compliant products (the price cap being implemented from 2 January 2015) and so business models must ensure that no customer will ever repay more than double what was borrowed initially, or put another way, more in interest and charges than the amount of the initial loan.It is not, and never has been, in our commercial interests to make loans to applicants who we do not think will be able to repay and there is no incentive for us to do so if our business model is to remain sustainable.

Our complaints policy is clearly displayed on our website and summary details are included in our customer facing documentation.

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