More banking complaints as building societies convert

Bank complaints were up 10 per cent last year, according to the Banking Ombudsman, the watchdog for the sector. Demutualisation of leading building societies, such as Halifax, was at least partly to blame, he said.

The Ombudsman said: "During the year, a significant number of large building societies have become banks. So we cover an ever-increasing number of bank customers and the conversion process itself generates some one-off problems."

In its annual report, released yesterday, the watchdog also called for more harmonisation between the various financial services ombudsmen. One of the weaknesses of the current system is in dealing with so-called "mixed complaints" involving more than one financial services sector, such as banking and insurance. Currently, there are five ombudsman schemes covering different sectors.

In the year to September, the Ombudsman received 8,818 written complaints, 774 higher than in the previous year. Lending, either because customers believed they had wrongly been refused loans or because facilities had been withdrawn at short notice, remained the most common source of complaints.