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Lloyds tops list of bank complaints

Lloyds TSB received almost 20,000 complaints in the first half of the year, the majority relating to PPI

Lloyds Banking Group prompted more complaints to the Financial Ombudsman Service (FOS) in the first half of 2011 than any other financial services organisation, according to latest figures.

In the first six months of the year the FOS received 37,696 complaints about the banking group, including 19,569 concerning Lloyds TSB (the highest number for an individual bank); 13,021 about Bank of Scotland; and a further 5,106 across smaller divisions. The majority of the Lloyds TSB and Bank of Scotland complaints related to payment protection insurance (PPI), with a respective 16,965 and 9,945 complaints flooding in between 1 January and 30 June 2011.

In total the Lloyds group received almost double the number of complaints as the Barclays group, which came second in the list. The latter attracted 16,864 complaints for Barclays Bank, along with 1,407 for its Firstplus Financial Group division, 719 complaints about Clydesdale Financial Services, and 60 complaints for a Dublin-based insurance arm. Again, PPI accounted for the majority of complaints about Barclays Bank, with 12,862 lodged with the ombudsman.

The FOS found in favour of the consumer in a higher proportion of Lloyds TSB cases, upholding 63% of total complaints compared to 43% of Barclays Bank customer complaints. It also found in favour of the consumer in 44% of Bank of Scotland complaints. The average across all businesses was 47% of cases upheld in favour of the consumer.

Elsewhere in the table, HSBC attracted 14,071 complaints while Royal Bank of Scotland prompted 13,241 (including 5,863 complaints for the bank itself, as well as 5,628 NatWest complaints), and 6,434 Santander customers complained to the ombudsman.

Santander said complaints to the bank had dropped because it was not part of the industry’s legal action on PPI.

Many groups had put some or all of their PPI cases on hold while the banking industry mounted a legal challenge to the complaint handling measures introduced by the Financial Services Authority (FSA). The banks abandoned their challenge in May 2011, opening the way for millions of people to receive compensation totalling billions of pounds.

But it was reported recently that some banks were in danger of missing the 31 August deadline imposed by the FSA for clearing their backlog of PPI mis-selling complaints.

Consumer groups said the ombudsman’s figures were strong evidence of the banks’ inability to treat PPI complaints fairly.

Oliver Morgans, financial services expert at Consumer Focus, said: “There has been a massive surge in complaints about this issue with some banks showing a totally unacceptable uphold rate. Even the seemingly better performers appear to be unnecessarily stringing out complaints, challenging decisions and denying consumers compensation.

“The banks should be ashamed at their continuing failure to tackle the PPI issue. Following the court case we expect the next set of FOS figures to show PPI complaints are being dealt with properly by banks without consumers needing to contact the ombudsman.”

Which? executive director Richard Lloyd agreed:”These numbers show that some banks are still not dealing with PPI complaints fairly. If the next round of complaints data doesn’t show a dramatic improvement then the FSA must take tough enforcement action against banks whose complaints handling isn’t up to scratch.”

A spokesperson from Lloyds said: “Overall we have made progress in the vast majority of complaint categories, reducing both the number of complaints being referred to the FOS and decreasing the number of decisions being overturned.

“However the increase in PPI complaints is consistent across the industry. It is clear we have more work to do and we expect our progress in the first half of 2011 to continue into the second half of the year.”

It recently emerged that the ombudsman service is so overwhelmed by consumer complaints that many cases are now taking between 18 months and two years to be resolved.

The FOS blamed the delays on a doubling of its workload over the past five years – including a 26% increase in the number of cases referred in the last year alone – with adjudications also increasingly being appealed against. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds