Barclays most complained about bank
Barclays Bank received the most customer complaints for the first half of 2011, according to data from the Financial Services Authority (FSA).
Barclays tops the January-June 2011 table with 251,563 complaints. Lloyds is second with 181,907, followed by Santander, which received 168,888. These figures are for the banking groups' collective operations and include retail banking, stockbroking and insurance services.
Financial firms are required to send their complaints data to the FSA every six months for publication.
Barclays' chief executive of retail and business banking Antony Jenkins says the bank has made progress in reducing complaints, which are down by 14% compared to last year.
"When we do get it wrong, we apologise, try to correct it quickly and identify how to prevent it from re-occurring," Jenkins adds.
"However, there is much more to be done and we are working hard to further improve our service to our customers; putting them at the heart of our business and getting it right first time, every time."
In a slight reshuffle, Barclays and Santander come first and second for retail banking, notching up 162,611 and 139,386 complaints respectively, and NatWest follows behind with 96,205.
Better news for Santander
The FSA figures reveal that of the worst culprits, Santander is the best at closing complaints within an eight-week period, managing to address 98% of customer issues within this timeframe. Barclays closed 89%, and Lloyds 77%, within the same period.
Santander says the number of complaints it received for the first half of 2011 is down by 31% on the same period in 2010 but improving its service remains its "top priority". Steve Williams, director of service quality, says the reduction in banking complaints is the result of "intense focus at Santander UK".
"We are still working hard as we want to continue this improvement. Initiatives such as returning our overseas retail banking call centres to the UK are part of our ongoing programme to further improve service," Williams adds.
Martin Dodd, customer services director for Lloyds Banking group is similarly upbeat. He reports a 24% reduction in the level of complaints Lloyds received in the first half of 2011 against the same time in 2010.
"In the first half of the year, we made real progress in improving our customer service and reducing the number of complaints that we received," he says. "We recognise that we still have more work to do, and we are working towards clear and challenging targets for the remainder of the year to ensure that we maintain that progress."
Despite the banks' reporting a reduction in complaints received, overall FSA figures are less positive. The total number of complaints increased by 3% to 1,852,284 and the payment protection insurance mis-selling scandal has significantly contributed towards this jump, accounting for 848,357 complaints.
Paul Clark, chief executive of customer service software specialists Charter UK, says it's "no surprise" complaints have risen in the last six months.
"Banks are now facing a 'perfect storm' in terms of how they sell their products in the future, formed of three different elements – PPI mis-selling; regulatory changes to complaints handling; and the FSA's tougher stance on overall financial regulation," he says.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
The practice of a dishonest salesperson misrepresenting or misleading an investor about the characteristics of a product or service. For example, selling a person with no dependants a whole-of-life policy. There have been notable mis-selling scandals in the past, including endowment policies tied to mortgages, employees persuaded to leave final salary pensions in favour of money purchase pensions (which paid large commissions to salespeople) and payment protection insurance. There is no legal definition of mis-selling; rather the Financial Services Authority (FSA) issues clarifying guidelines and hopes companies comply with them.
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.