The Financial Services Authority (FSA) said that five unnamed high street banks must make “major changes” to the way they dealt with grievances. Two of these were being investigated and could face big fines.
Call centre and branch staff consistently ignored complaints or carried out poor investigations even when the bank was at fault, the report stated. It also found that incentive schemes encouraged staff to be more interested in selling products than settling complaints. In come cases staff were given targets to keep redress amounts as low as possible.
The five banks that were the subject of most complaints were Lloyds, Barclays, RBS, Abbey and HSBC, according to the Financial Ombudsman Service, although HSBC confirmed that it was not being investigated by the FSA. Last year three million customers complained to their bank and 127,471 escalated their complaints to the Ombudsman, which settles disputes.
Dan Waters, the FSA’s director of conduct risk, said: “It is vital that customers know that if something goes wrong their complaint will be dealt with in a reasonable way and that they will get a fair outcome.
“While we found some good practice, there is clearly evidence of unacceptable standards of complaints handling in banks. Delivering change in this area is a major priority and we are determined to use all the tools available to ensure that banks comply with our rules.”
The proportion of complaints upheld by the Ombudsman in favour of the customer rose to 59 per cent this year, compared with 50 per cent last year.
“Payment protection insurance is by far the biggest area of complaint, and we continue to uphold almost 90 per cent of these cases,” Emma Parker, of the Financial Ombudsman Service, said. “There is still evidence of poor complaint handling and room for significant improvement at some banks.”
Other common areas of complaint include the mis-selling of mortgage endowment policies and other with-profit investments, overdraft charges, credit card interest rates and a lack of payouts from travel insurance policies.
Vera Cottrell of Which?, the consumer magazine, said: “It is really worrying that at the heart of the banking industry lies a total lack of concern for what is fair for consumers. Most people are just dismissed by their bank and only the very persistent complainants will get anywhere.
“The FSA’s report shows that banks can’t be trusted to deal with complaints properly and that many more consumers should be taking advantage of the Financial Ombudsman Service. Only a tiny minority of people take their case to the Ombudsman, but many would be successful and gain the redress they deserve.”
Eric Leenders, of the British Bankers' Association, said: "The vast majority of customers carry out their day-to-day banking with no problems. However the industry was concerned that, on the rare occasions things go wrong, complaints were being handled inconsistently across the industry.
“The British Bankers' Association has already hosted the first of a series of seminars bringing together senior industry figures to discuss the issue and share best practice. Clearly more needs to be done.”<< Archive
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