Page last updated at 06:58 GMT, Tuesday, 15 September 2009 07:58 UK

Banks identified over complaints

Chief Ombudsman Walter Merricks on why complaints are on the rise

Financial firms had an average of 59% of the complaints against them upheld by the Financial Ombudsman Service (FOS) in the first half of 2009.

The FOS deals with complaints from customers when firms are unable to settle them themselves.

The top five High Street banks accounted for more than half the complaints received by the FOS.

The banking firms are Lloyds Banking Group, Barclays, RBS-NatWest, Abbey and HSBC.

The FOS said it was publicising the names of individual firms to force them to resolve more complaints themselves.

"We have already been providing comparative complaints data on a private basis to the larger financial businesses - but this has led to no improvement in the standard of complaints handling by the worse-performing businesses," said Walter Merricks, the outgoing chief ombudsman.

"Putting this information into the open will now give those worse-performing businesses vital encouragement to improve - which should mean fewer of their customers having to bring complaints to the ombudsman that should already have been resolved," he added.


In the first half of this year the FOS received almost 70,000 complaints, nearly 90% of which had been generated by customers of just 142 businesses out of the 100,000 the FOS covers.

Most bank account and loan complaints upheld
CitiFinancial (88%)
Capital One (87%)
Shop Direct (80%)
Santander Cards (79%)
Egg (78%)
Abbey National (71%)
Alliance & Leicester (70%)
GE Money (69%)
Shop Direct (69%)
Bank of Ireland (68%)
Citibank (68%)
Barclays (67%)
American Express (64%)
PayPal (64%)

The top five High Street banks each had more than 3,000 complaints against them, with Barclays accounting for the most with 8,283.

Together they accounted for 38,000 complaints.

But taking into account its brands such as Bank of Scotland, Cheltenham & Gloucester and numerous insurers, the wider Lloyds Banking Group had 15,233 complaints that went to the Ombudsman - 22% of the total.

The Ombudsman acknowledged that as the banks each have millions of customers they are likely to have most complaints.

But the FOS highlighted the very high level of complaints that it had upheld.

Regarding bank accounts and loans, an average of 61% of complaints were upheld, led by CitiFinancial and Capital One.

HSBC (59%), Lloyds (54%), NatWest (54%), and RBS (55%) were below average for complaints upheld.

An even higher percentage of general insurance complaints, 70%, were settled in the customers favour.

The highest levels were against Egg (99%), MBNA (99%), Black Horse (99%), Firstplus (99%), Capital One (98%), Lloyds TSB (98%), Northern Rock (98%), Co-op bank (97%), Tesco (97%), HFC, part of the HSBC group(96%), RBS (94%), Barclays (93%), NatWest (89%), Clydesdale bank (81%), and HSBC (79%).


Earlier this year the FOS accused many firms of being deliberately unhelpful to people who complained about poor service, to fob them off rather than deal with their complaints properly.

How many more people have given up on the way?
Marc Gander, CAG

"Naming and shaming these companies is a victory for consumers but humiliating for the industry, who have had five years to get their houses in order," said Which? chief executive, Peter Vicary-Smith.

"Over half of the complaints to FOS are upheld in favour of the consumer; they should have been dealt with by providers' internal procedures before reaching that point," he said.

Lloyds TSB said the "vast majority" of its 30 million customers were satisfied with its service .

"This is reflected in the low number of complaints we receive in relation to the high number of customer accounts we hold," the bank said.

"We take all customer complaints very seriously and encourage customers to contact us directly should they have a concern about one of our products or the service we provide."

HSBC had a similar message.

"We resolve the vast majority of issues for our customers within 48 hours," said a spokesman.

"Only a tiny proportion of complaints are referred to the FOS and we are working hard to reduce this even further," he added.

But Marc Gander of the Consumer Action Group was unimpressed.

"It is a scandal. How many more people have given up on the way?" he asked.

Millions of complaints

Two weeks ago the Financial Services Authority (FSA) revealed the huge scale of complaints that have built up in the financial services industry.

More than nine million individual complaints were made to financial firms in the 2006-2008 period, and more than half of them were about banking and loans.

The rising numbers have been driven by a huge increase in complaints about bank overdraft charges, and about the mis-selling of payment protection insurance and mortgage endowments.

During the second half of 2008, 40% of complaints were being settled by firms in their customers' favour, the FSA found.

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