The number of complaints against Britain's banks and building societies has increased almost tenfold in the past year, as thousands of consumers have elected to fight unfair charges and poor customer service.
According to the latest figures from the Financial Ombudsman Service, more than 31,618 people filed complaints about unfair current account charges in the year to April – up 862 per cent from 3,285 in the previous 12 months. Credit card complaints also rose dramatically – by 417 per cent – while complaints about payment protection insurance increased almost sixfold.
Complaints about mortgages, insurance, loans, savings and pensions also all rose by between 25 and 90 per cent. The Ombudsman's figures are likely to only reflect a fraction of the total complaints as they only look at cases that have been turned down by the banks' and building societies' complaints departments.
David Kuo, the head of personal finance at fool.co.uk, the financial portal, said the sharp increase in complaints reflected the growing complexity and opacity of British banking products and an increased willingness to stand up to the banks.
"In some cases, such as with payment protection insurance, people are sold products that are totally unsuitable for them," he said. "They only discover this when they claim and it's too late."
News of the sharp rise in payment protection insurance complaints came as the Consumers' Association published new research claiming that as many as two million Britons may be sitting on unsuitable policies which they should never have been sold.
The association said that many people who were self-employed or on a fixed-term job contract are often not covered by PPI policies but are still sold them when they take out loans and credit cards. In some cases, the PPI premiums are higher than the cost of the loan interest.
"We've always known that people were being missold PPI, but we were still amazed to discover the scale of it," said Doug Taylor, a personal finance campaigner at Which?. "Salespeople are chasing commissions, their bosses chasing profits – where's the sense of responsibility to the customer? If you think you might have been missold PPI, now's the time to fight back. Compensation could be just a letter away."
Which? offers template complaint letters on its website. Over the year to April, the Ombudsman fully or partly upheld almost 90 per cent of all current account charges complaints, and 86 per cent of all credit card complaints.
Increase in complaints from 2006-07 to 2007-08
862 per cent increase in current account charges (from 3,285 to 31,618). Number of complaints fully or partly upheld: 88 per cent
417 per cent increase in credit card complaints (from 2,731 to 14,123). Number of complaints fully or partly upheld: 86 per cent
481 per cent increase in Payment Protection Insurance complaints (from 1,832 to 10,652). Number of complaints fully or partly upheld: 47 per cent
56 per cent increase in complaints about mortgages (from 4,366 to 6,824). Number of complaints fully or partly upheld: 38 per cent
42 per cent increase in number of complaints about motor insurance (from 4,230 to 6,009). Complaints fully or partly upheld: 51 per cent
67 per cent increase in complaintsconcerning unsecured loans (from 1,755 to 2,940). Number of complaints fully or partly upheld: 44 per cent
86 per cent increase in complaints concerning savings and deposit accounts (from 1,438 to 2,675). Number of complaints fully or partly upheld: 40 per cent
26 per cent increase in complaints about home insurance (from 3,189 to 4,032). Number of complaints fully or partly upheld: 39 per cent
44 per cent increase in complaints about personal pensions (from 3,687 to 5,297). Number of complaints fully or partly upheld: 18 per cent
Source: Financial Ombudsman Service