James Daley

By James Daley

I have a credit card with Nationwide Building Society - and when I rang them yesterday to increase the amount that I pay off each month - I was astonished by the way the call ended. "Would you like me to read you the disclaimer, sir?," said the friendly agent, "Or would you like me to put it in the post?"

There was no mention of what the disclaimer was about, and when I asked for the general gist, I was told that it was merely about direct debits and that it would take about two minutes to read.

It's hard to believe that faced with the same situation, most people wouldn't do what I did - which was to decide that I'd rather do anything else in the world that spend the next two minutes listening to a recitation about direct debits. But if the disclaimer was important - and was relevant for the transaction that I had just set up - then, surely I shouldn't have been given an option. And if the disclaimer wasn't important, then why bother including it - or even wasting a stamp on sending it out in the mail? Let's face it, if it weren’t for the fact that I read terms and conditions for a living, then this would be exactly the kind of letter that would go straight in the bin.

Ticking boxes

With some more time on my hands I rang Nationwide back this morning and asked them to read me the disclaimer. It took about 20 seconds, and basically outlined the terms of the direct debit guarantee. Given that I already had a direct debit in place - and was merely altering the amount - this was a pointless box-ticking exercise. Although at least in this case, it was a waste of time due to a comany erring on the side of caution.

If you purchase a new insurance or banking product over the phone, there are usually lengthy disclaimers that need to be read out along the journey - some of which are crucial. Many of these really do run to two minutes and beyond - and even if you're interested, the scripts and the monotonous drone in which they’re read often make it hard not to switch off and start thinking about what you're going to be having for dinner.

This is all part of the wider challenge around how companies get information over to their customers in the most effective way. And Nationwide’s clumsiness with its optional disclaimers illustrates the difficulty perfectly.

Someone in the Nationwide compliance team will presumably have decreed that if anyone sets up or alters a direct debit, then they need to be made aware of the direct debit guarantee. Next up, someone in charge of customer experience will have pointed out that customers hate being read disclaimers on the phone - resulting in the bizarre conclusion that customers can opt out of listening to the disclaimer at the point that it’s relevant, and can choose to receive it in the post instead.

Turning on light bulbs

This is the worst of all worlds. First up, organisations like Nationwide need to be clear on what needs to be disclosed and what doesn't. The details of the direct debit guarantee could - in my opinion - be left to a letter in the mail. But for more important information, companies need to try and move away from monotonous scripts, which encourage customers to tune out. The aim of the game has to be that the customer leaves the call having digested all the key pieces of information that need to be disclosed - and the best way to get this across is through a dialogue.

From my experience as a lecturer, I know that students find it much harder to digest something when you stand at the front of the class and talk at them for an hour. Interacting with them is what turns the light bulbs on.

Companies need to be brave and stand up to their compliance teams and lawyers, whose job it is to find ways  of demonstrating that all the regulatory boxes have been ticked - but who often have no regard for the customer experience. By throwing the kitchen sink at customers, they often leave people confused or disengaged rather than educated at the end of a call.

The FCA will begin its work into the issue of complex terms and conditions next month. That may seem like a different issue, but we'll be urging the regulator to look at the quality of information given over the phone, as well as the physical documents. It’s all part of the same challenge - which is to ensure customers are armed with all the information they need when they buy new financial products. And there’s a long way to go.