James Daley

By James Daley

In the six years since the financial crisis, not nearly enough seems to have changed in Britain. Many banks and insurers are still up to the same tricks that they were a decade ago - and barely a week seems to go by without yet another company being fined for failing to treat their customers fairly.

It's not hard to see why this keeps on happening. The people who run banks and insurers are beholden to their shareholders, who demand an increase in their dividend, and ideally an increase in the value of their investment evey year.

Although everyone knows that keeping customers happy is important for the long-term prosperity of their business, investing in your customers costs money - and the rewards take several years to start to flow. Far easier to play the game that everyone else has been hooked on for decades. In insurance, it goes something like this:

  • Step one - hook your customers in on a cheap price, but protect some of your profits by charging them for extra bits of cover that they don't need or want (or by removing some of the basics which they assumed were included in their policy).

  • Step two - try as hard as possible to reject every claim.

  • Step three - try to squeeze through an inordinately large price hike when it's time for renewal, and hope the customer can't remember what they paid last year.

  • Step four - marvel at your good fortune that so many people paid up when they could have paid half the price if they'd shopped around.

  • Step five - don't fixate on the customers who left feeling angry - they'll soon realise that everyone else is up to the same tricks.

In this kind of environment, the deck is stacked against the customer. Few people have got the time or inclination to understand the small print of insurances and banking products - in an attempt to ensure they're comparing like with like. Instead, they're forced to hit and hope - buying the product that's cheapest, and keeping their fingers crossed that it will do everything they need it to.

Enter Fairer Finance

We launched Fairer Finance to help provide a real incentive for companies to start treating their customers well - an incentive to break the addiction to the pusuit of short-term gain over everything else. By collating the opinions of today's customers of banks and insurers, and analysing their track record on complaints handling and transparency, we hope to give customers the information they need to reward companies who treat their customers well, and to send send a message to those who don't. Price will always be one of the most important factors when it comes to choosing an insurance product or loan - but if we can encourage people to give their business to the companies who do right by their customers, then the rest will have to up their game.

We've not launched Fairer Finance as another platform for bank bashing. Instead, we want to celebrate good practice, and work with companies to help them change if they want to.

Our hope is that our gold, silver and bronze ribbons will be seen as a genuine mark of quality, which customers will gravitate towards when they're looking for good service.

Although we're only launching in six product areas this March, we hope to branch out much more widely later this year, and we'll be commenting on all areas of personal finance from the very start - playing our role in holding the industry to account.

It's a great shame that the government's consumer body, Consumer Futures, is in the process of being shut down. And while we've still got great organisations like Which? and Ctizens Advice fighting for a fair deal for consumers, we think there's a need for more, not less, organisations working to ensure that consumers get a fair deal. That's why we'll be using some of our profits to fund a campaigning arm that will work to create a fairer financial services market for everyone.

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