Barclays and Lloyds top complaints list

Barclays and Lloyds were the most complained about banks during the first six months of this year, the Financial Ombudsman Service revealed today as it published the complaints record of major financial institutions for the first time.

A total of 8,283 complaints were made about Barclays – 12 per cent of the total made about the financial services industry – while Lloyds received 5,804.

Both banks settled high levels of cases in favour of customers, 81 per cent for Lloyds and 71 per cent for Barclays, showing that the overwhelming majority of complaints about them were justified.

The Financial Ombudsman Service (FOS) decided to publish complaints data for 142 of 10,000 financial providers because sending individual data to banks had resulted in “no improvement” in their behaviour.

“I believe putting this information into the open will give those worse-performing businesses vital encouragement to improve – which should mean fewer customers having to bring complaints to the ombudsman that should already have been resolved,” said Walter Merricks, the chief ombudsman.

Individuals can make a free complaints to FOS about a financial product, whether banking, loans, credit, cards, insurance or investments, after going through a firm’s complaints process.

FOS received 69,841 complaints in the first half of 2009. Although most were about banks, the starkest figures were the proportions of insurance cases won against financial firms.

All the main high street banks, credit card and loan providers, settled a large number of insurance-related complaints following a surge in complaints about Payment Protection Insurance (PPI), intended to guarantee payments in the event of illness or redundancy.

As The Independent has reported over the past two years, PPI has been routinely mis-sold to cusomers who could never have made a claim because they had a pre-existing medical condition or were self-employed. Others were pressurised into taking out PPI or were not told they had bought a policy.

Complaints to FOS about PPI trebled in the year to 31 March 2009 and 67 per cent of its insurance cases now relate to PPI.

For the first six months of this year, complainants won 98 per cent of insurance cases against Lloyds, 98 per cent against Northern Rock, 93 per cent against Barclays, 89 per cent against NatWest and 79 per cent against HBOS and HSBC.

For credit card and loan specialists, complainants won 99 per cent of insurance cases against Egg and MBNA Europe, 98 per cent against Capital One and 96 per cent against HFC Bank.

Martin Lewis, of Moneysavingerxpert.com, who has campaigned against PPI mis-selling, said the percentages showed that banks initially brushed off legitimate complaints.

“Big providers like Egg, Black Horse, MBNA and Lloyds lose up to 99 per cent of cases that get to the Ombudsman. In other words, sometimes, only one in one hundred initially gets compensated,” he protested.

“Therefore, consumers must adopt a simple strategy with the banks from now on: just ignore the protestations that they haven't done anything wrong, no matter what they say, and wait for real justice via the Ombudsman.”

Which?’s chief executive Peter Vicary-Smith described publication of the figures as “a victory for consumers and humiliating for the industry.”

The British Bankers’ Association said they showed that most bank customers were satisfied, because there was only one upheld complaint per 10,000 products sold.

“These numbers published by the ombudsman show that most customers have no problems with their bank,” said executive director Eric Leenders.