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Banks hit by complaints backlog
The UK's banks had to deal with a huge backlog of complaints in the second half of last year, figures from the FSA show.
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Banks and building societies dealt with 2,014,000 complaints, up from 867,427 in the first half of the year.
This was because they were finally allowed to process more than a million complaints about overdraft charges.
These had been on hold since the middle of 2007, pending the outcome of a high-profile legal test case.
This was finally resolved last November in favour of the banks, when the Supreme Court ruled against an attempt by the Office of Fair Trading (OFT) to challenge the fairness of bank overdraft charges using existing consumer protection laws.
"The complaints were put on hold with an FSA waiver for the duration of the test case between the OFT and major banks, which ended last December," the FSA explained.
"Banks now have to deal with these complaints, which account for most of the increase in complaints specifically related to banking during this period."
Compensation Overall, the financial services industry received nearly 2.7 million complaints in the last six months of 2009, up from 1,510,886 in the first half of the year.
This was the largest number since the initial surge of bank overdraft complaints hit the industry in the first half of 2007, when in total just over two million complaints were received.
After banking services, the next largest category of business that upset customers was general insurance and pure protection, which generated 421,368 complaints, up from 337,000 in the previous six months.
It was these policies that led to most compensation being paid to customers.
Banks, building societies and other sellers of insurance repaid £144m to customers in the last half of 2009 as a direct result of their complaints, out of a total of £284m redress paid to buyers of all types of financial product.
Of the insurance complaints, 174,000 related to the mis-selling of payment protection insurance.
More...
Banks and building societies dealt with 2,014,000 complaints, up from 867,427 in the first half of the year.
This was because they were finally allowed to process more than a million complaints about overdraft charges.
These had been on hold since the middle of 2007, pending the outcome of a high-profile legal test case.
This was finally resolved last November in favour of the banks, when the Supreme Court ruled against an attempt by the Office of Fair Trading (OFT) to challenge the fairness of bank overdraft charges using existing consumer protection laws.
"The complaints were put on hold with an FSA waiver for the duration of the test case between the OFT and major banks, which ended last December," the FSA explained.
"Banks now have to deal with these complaints, which account for most of the increase in complaints specifically related to banking during this period."
Compensation Overall, the financial services industry received nearly 2.7 million complaints in the last six months of 2009, up from 1,510,886 in the first half of the year.
This was the largest number since the initial surge of bank overdraft complaints hit the industry in the first half of 2007, when in total just over two million complaints were received.
After banking services, the next largest category of business that upset customers was general insurance and pure protection, which generated 421,368 complaints, up from 337,000 in the previous six months.
It was these policies that led to most compensation being paid to customers.
Banks, building societies and other sellers of insurance repaid £144m to customers in the last half of 2009 as a direct result of their complaints, out of a total of £284m redress paid to buyers of all types of financial product.
Of the insurance complaints, 174,000 related to the mis-selling of payment protection insurance.
