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Bank complaints soar by 122%
FSA says figures reflect increasing unhappiness over customer service and 'unfair' charges
- guardian.co.uk, Thursday 3 September 2009 15.03 BST
Data collated by the Financial Services Authority (FSA) showed a 122% increase in complaints about banking and loan products, from 608,620 at the beginning of the second half of 2006 to 1.3m at the end of the first half of 2007.
This included a 259% increase in complaints about overcharging, and a 71% increase in those about poor customer service.
This trend reversed in the rest of 2007 and throughout 2008 following the FSA's decision to allow banks to postpone dealing with complaints relating to unauthorised overdraft charges until the conclusion of a court case over their fairness.
The FSA waiver means that although banks still need to record any complaints they receive, they do not need to include them in their complaints returns to the regulator.
However, over the entire two-year period complaints to banks still increased by 32% from 760,000 to 1m. Complaints against building societies more than doubled from 38,989 to 79,349.
Consumer group Which? said it was a poor reflection on the banking industry that there are so many unhappy customers. Phil Jones, personal finance campaigner for the body, said: "Financial firms simply aren't treating consumers well enough and things must change if the industry is to rebuild its reputation."
Banks will undoubtedly come under the spotlight again in two weeks when the Financial Ombudsman Service (FOS) publishes company-specific complaint figures for the first time. The FSA is also consulting on a similar exercise, which it hopes to implement in October next year.
Banks and other financial services providers have complained that such "naming and shaming" will be unfair to those companies with the biggest customer bases, as they are likely to attract the biggest number of complaints.
They also argue that the data is too general to be of any use to a customer choosing between different companies for a particular product: both the FOS's and the FSA's data cover just five product areas.
Maggie Craig, director of consumer strategy for the Association of British Insurers, said: "The current format to be used by the FOS, and later the FSA, for publishing company-specific data will not help consumers because it doesn't allow them to compare the performance of different companies for specific products, such as motor or home insurance, on a like-for-like basis.
"Without this level of detail the published data will be of no real help to consumers and, without the right context, we remain very concerned that it might even be misleading."
Which? agreed that more detailed product-specific information should be provided, and called for complaints to be published by the company's trading name rather than the name under which it has been authorised by the FSA. The trading brands and authorised names often differ, making the data even less useful for consumers.
Complaints by number
• Complaints about credit cards more than doubled from 73,500 to 151,000 from the beginning of 2006 to the end of 2008.
• Complaints about cash Isas more than quadrupled from 8,700 to 39,259.
• Complaints about current accounts were up 46% from 368,000 to 536,000.
• Complaints about general insurance and other types of pure insurance more than doubled from 62,000 to 127,000, mostly because of problems with payment protection insurance.
• Complaints about poor customer service in all financial firms increased by 28% from 187,000 to 239,500.
