Fos branded ‘unfair’ over complaint decision

Derbyshire-based Graham Wallace has alleged HSBC allowed his nephew, who he said was developmentally slow, to roll up a £2700 personal loan taken out in the year 2000 on five separate occasions as he struggled to fulfil repayments.

His nephew is not “financially educated”, according to Mr Wallace. However, he was still allowed to accumulate debt approaching £16,000 with HSBC, and was offered a credit card.

Dee Caunt, chief executive of charity The Dyslexia Association, said the condition could affect a person’s reading and comprehension, which could affect someone’s understanding of financial documents, in addition to dealing with figures.

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Mr Wallace claimed that a bank adviser at his local HSBC branch in Malvern, Worcestershire, had advised his nephew to take out the increasingly burdensome loans, despite being aware of his learning difficulties.

By 2003, the man, who is now 55 years old, had to take out a homeowner loan with Halifax to the tune of £20,125 to cover the debts with HSBC, contributing to what Mr Wallace called “a spiral of debt” in excess of £70,000 from overdraft charges, loans, credit cards and his mortgage.

His family became aware of his financial difficulties in 2004, and subsequently lodged complaints with HSBC and with the Fos in 2006. However, the complaints were not upheld, with a final decision from Fos in 2012 deeming the lending by HSBC and its treatment of the man as “fair and reasonable”, a decision that led Mr Wallace to claim it was “not fair and impartial, particularly when a complaint was made about a major high street bank”.

A spokesman for Fos said it was unable to discuss the individual complaints or Mr Wallace’s allegations. She added: “However, when looking at complaints of irresponsible lending we would expect to see that lenders have checked whether a consumer will be able to repay the debt, and how they assessed that ability.

“We would not expect to see a business refuse to lend to a consumer solely on the basis that they had learning difficulties – as there are many different factors that we would expect to see it has considered.”

When asked why it had taken six years to reach a final decision, the Fos spokesman said it could not comment on individual cases. However, generally, she said the process of converting an initial enquiry into a formal complaint took “a couple of weeks”, before being handed to a complaints adjudicator, whose level of qualifications can vary.

The adjudicator takes between four weeks and two months on average to come to a decision, before contacting the complainant with a decision.

A complainant can ask for a review if they disagree with the decision, or a formal ombudsman review. If they agree with the final decision, it is legally binding, and only challenge-able with a judicial review. If they do not agree, they can seek court action.

A spokesman for HSBC said it could not comment on individual account holders.


The Financial Ombudsman Service launched a partnership with several charities in 2010, including the Citizens Advice Bureau and Dyslexia Awareness, designed to help staff understand the different communication needs of customers who use the service and to raise awareness among providers and businesses that financial services information needs to be provided in clear, accessible formats.

Its annual review for 2012/13 revealed that Fos received 508,881 new complaint cases, and resolved 223,229. Cases which went to appeal for a final decision numbered 24,332. Some 89 per cent of complaints were resolved within 12 months. The ombudsman employs 2600 people.