What are your consumer rights for financial services?

When an appliance breaks down, we either contact the retailer for assistance or get in touch with the manufacturer to arrange a service call for repairs. Sometimes, we might even be entitled to a refund.

But what about intangible services, like financial solutions or insurance products? You can’t put a bank account back into its original packaging, and no tool kit will fix an unsuitable investment. 

Thankfully, consumer rights apply to financial services as well as tangible goods – and understanding them is the key to getting fair treatment from banks and other financial institutions when things go wrong. 

Below, we’ll guide you through consumer rights for financial services, giving you a clear path to resolving disputes and securing refunds or compensation when necessary. 

What are consumer rights in the UK? 

In the UK, consumer rights are covered under various laws that ensure you receive fair treatment when buying goods or services. The main pieces of legislation include the Consumer Rights Act 2015, which protects you from faulty products or unfair terms in contracts, and The Financial Services and Markets Act 2000, which regulates financial institutions. These laws cover everything from faulty products to misleading contracts and poor service. 

For financial services specifically, the Financial Conduct Authority (FCA) regulates how companies should act, ensuring they provide clear, transparent and fair services to consumers – including you. 

How do consumer rights apply to financial services? 

When it comes to financial services, consumer rights are there to make sure you're treated fairly, given accurate information and have recourse if something isn't right. For example, if you're mis-sold an investment or your bank account is unfairly closed (also known as debanking), you can complain to the company. If the business doesn’t respond or you’re not satisfied with the proposed solution, you can escalate your complaint to the Financial Ombudsman Service. 

Under UK law, financial institutions are meant to treat you fairly, provide you with the correct information about their products and help you understand your options. They must also help if you’ve been a victim of fraud or if someone has made an unauthorised transaction on your behalf. 

What is the Consumer Duty and how does it protect me? 

The FCA’s Consumer Duty came into force in July 2023. A significant upgrade to consumer protection in banking and other financial services, it demands that firms act in the best interests of their customers and deliver good outcomes for them. In layman’s terms, this means financial companies must ensure their products and services meet customer needs, are clearly explained and perform as expected. 

Under Consumer Duty, firms must: 

• Communicate clearly so you can make informed decisions. 

• Offer products and services that are fit for purpose and aligned with your needs. 

• Monitor outcomes to make sure customers aren’t being harmed by services or products. 

  
  

If a financial firm doesn’t act according to these guidelines, you have the right to challenge its behaviour and potentially receive compensation. 

What is Section 75? 

Section 75 of the Consumer Credit Act 1974 is a powerful tool for consumers with credit cards. It holds credit card providers jointly liable with retailers if something goes wrong with a purchase.  

If you buy goods or services worth between £100 and £30,000 using a credit card and the supplier fails to deliver or the product is faulty, you can claim a refund from the credit card provider as well as the seller.

For example, if you book a holiday or buy an expensive gadget that never arrives, Section 75 allows you to claim your money back from your card issuer rather than the travel agent or retailer, giving you an extra layer of protection. 

What is a chargeback? 

A chargeback is a process where you can ask your bank or credit card provider to reverse a transaction if you’ve been misled or scammed, or if there’s been an issue with a product or service. It’s a voluntary scheme offered by banks and card providers rather than being enshrined in law, making it different from Section 75. 

You can use chargeback to recover funds in a variety of situations: 

• If a purchase doesn’t arrive. 

• If you were charged the wrong amount. 

• If a company goes out of business and can’t fulfil your order. 

  
  

Chargebacks are especially useful for purchases under £100, where Section 75 wouldn’t apply. Although providers don’t legally have to approve a chargeback, you can still complain and escalate the issue to the FOS if you’re unable to get a refund and you believe you’ve been treated unfairly. 

What to do when things go wrong 

If something goes wrong with your financial service or product, follow these steps: 

• Contact the provider. Raise the issue with the company first. Banks, insurers, credit card providers and other financial institutions generally prefer to resolve issues quickly. 

• File a complaint. If you’re not satisfied with the firm’s initial response, file a formal complaint. The company must acknowledge and respond within a specific time frame – usually eight weeks. 

• Contact the Financial Ombudsman Service. If the company doesn’t resolve the issue to your satisfaction, you can escalate it to the FOS. The ombudsman will investigate your case and enforce a solution, including compensation if appropriate. 

Getting fast, fair treatment 

Consumer rights in financial services are designed to protect you and ensure you're treated fairly by banks and other financial institutions. Several pieces of legislation, including the Consumer Rights Act 2015, the Financial Services and Markets Act 2000 and the Consumer Credit Act 1974, outline what you're entitled to and give you several avenues for recourse if something goes wrong.  

If you ever feel your rights are being violated, don't hesitate to act. Contact your financial provider, explain the issue and if necessary, make a complaint. If you don’t receive a satisfactory response, you can escalate your problem to the Financial Ombudsman Service. 

At Interpolitan Money, we take a personal approach to alternative banking, ensuring each client receives tailored solutions and guidance for their unique financial goals. By building strong relationships, we help protect your rights while offering the clarity and support you need to grow your business across borders. 

To learn more about our solutions or open an account, get in touch today.