Nine million complaints against finance firms
Nearly nine million complaints were made against financial services firms between 2006 and 2008, driven by grievances against current accounts and mis-sold mortgage endowments.
The figures, released by the Financial Services Authority (FSA) for the first time, show banking and loan products caused the highest number of complaints during the three years and accounted for more than half of all those lodged.
Life and pension products also provoked a high number of complaints, with the majority concerning misleading advice. Overcharging, meanwhile, accounts for the biggest cause of complaints against banking and loan products.
There are still concerns about the speed companies deal with complaints, with 10% taking more than eight weeks to resolve. Around 40% of disputes were decided in customers’ favour.
Current accounts and overdraft fees accounted for a shocking 3.5 million complaints over the three-year period, followed by mortgage endowments (908,000). Credit cards, general insurance and savings accounts also attracted high numbers of gripes.
The total number of complaints rose from 2,727,000 in 2006 to hit 3,411,000 in 2007. Last year, this number fell to 2,903,000.
The figures also show that banks were the object of most complaints. From 2010, financial firms will have to publish their own complaints data.
Dan Waters, director of retail policy and conduct risk at the FSA, says: “Publishing this information will mean that consumers and firms can now see how many complaints the industry receives and how it deals with them.”
More than 1.2 million complaints received are still pending until settled by the courts.
The figures have provoked outrage among consumer groups. Phil Jones, personal finance campaigner at Which?, says: “It’s a poor reflection on the industry that there are so many unhappy customers out there.
"Financial firms simply aren’t treating consumers well enough and things must change if the industry is to rebuild its reputation.”
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.