Bank complaints fall by 5%, UK

During the first six months of 2014, the number of bank complaints in the United Kingdom fell by 5% to 2.36 million compared to the second half of 2013, the Financial Conduct Authority (FCA) reported on Thursday.

Total redress paid in the first six months of 2014 amounted to ₤2.34 billion. Customer complaints against banks and building societies represented 66% of the total, followed by general insurance intermediaries (13%) and other insurers (8%).

Despite the fall, the UK regulator says more needs to be done to bring the numbers down further. The priority is to make sure consumer interests come first, the FCA emphasized.

Complaints by Bank of Scotland customers increased significantly (see list below).

On a daily basis, about 13,000 complaints were registered every single day, which is still far too high.

The decline was driven by an 11% drop in the number of complaints regarding payment protection insurance to 1.24 million.

Complaints about current accounts, however, rose by 3% to 319,505.

The Financial Conduct Authority is a financial regulatory body in the UK, but operates independently of the government.

Credit card complaints fell by 10% to 127,708, while other general insurance products declined by 1% to 318,512.

There was a 4% increase in complaints about savings, including cash ISAs, while other banking products rose by 4% to 89,767.

Christopher Woolard, Director of Policy at the FCA, said “It is important that firms now get on top of the issues that are driving complaints.”

How did the top 5 banks compare?

Below is a list of how the UK’s five largest high street banks fared, and the percentage change from H2 2013 to H1 2014. These figures do not take into account how many customers each bank has:

• Barclays Bank plc: 278,426, a fall of -10%.

• Bank of Scotland plc: 265,640, an increase of +46%. Matt Hammerstein, who is in charge of Client & Customer Experience at Barclays, said “We are constantly making improvements to our day-to-day customer experience. However, our banking complaint figures reflect some significant one off changes in the first half of 2014.”

• Lloyds Bank plc: 264,115, a rise of +3%.

• National Westminster Bank plc: 140,342, a drop of -20%.

• Santander UK plc: 135,611, a fall of -13%. The Spanish bank pointed out in a statement that complaints regarding its banking services were 25% lower in H1 2014 than in H1 2013.

Banks’ handling of complaints got worse

On September 2, consumer organization Fairer Finance reported that complaints handling by UK banks had been deteriorating over the past 12 months.

It quoted the Financial Ombudsman Service who said the percentage of financial complaints which were upheld in the consumer’s favor rose to 57% in H1 2014, compared to 51% in H2 2013.

James Daley, founder and managing director of Fairer Finance, said:

“The banks made some good progress at cleaning up their complaints handling procedures in the first few years after the financial crisis. But improvements seem to now be stalling, and in some cases are even going in reverse.”

“If more than 50% of complaints to the Ombudsman are being upheld in favor of the customer, then quite simply banks are making the wrong decision when a customer first complains, more often than they’re making the right one.”

“Banks need to make every effort to sort out complaints at the very beginning of the process, and should be ready to give customers the benefit of the doubt more often – rather than forcing them to appeal to the Ombudsman, which can drag out disputes for months on end.”