Lloyds is the most complained about UK bank
Lloyds Bank was the most complained about financial group in 2011 with 20,310 complaints in the second half of the year.
This figure fell from 37,696 received by the Financial Ombudsman Service (FOS) in the first six months of the year, and the group says it's managed a reduction in complaints by 24% in the past year.
Although the Lloyds figures were significantly higher than those of any other financial institution, they do include complaints made about the rest of the group, including Halifax, Bank of Scotland, Scottish Widows and Cheltenham & Gloucester.
António Horta-Osório, chief executive of Lloyds, said: "I am pleased with the significant achievements we have made in reducing complaints in 2011. However, we need to keep improving and so we have set a new target for 2012 when we will aim to have no more than 1.3 complaints per 1,000 accounts."
Barclays followed in second place with 12,273 complaints, and MBNA and Royal Bank of Scotland were next with 9,903 and 6,553 complaints respectively.
Most of the complaints the Ombudsman received related to the mis-selling of payment protection insurance (PPI). The overall number of complaints to the FOS was down by 149,925 in the second half of the year as a result of the banks improving their handling of PPI cases.
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.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.