Britain's most complained about banks

Cash machinePPI once again tops the list of complaints to the ombudsman while Lloyds and Barclays are revealed as the most complained about high street banks.

The mis-selling of payment protection insurance (PPI) remains the top reason we complain to the Financial Ombudsman Service (FOS) and made up 63% of complaints in the first six months of the year.%VIRTUAL-SkimlinksPromo%
During this period the FOS received a total of 135,170 new complaints, a 27% rise from the previous six months, and 85,562 of these were to do with PPI.

The response rate to PPI complaints during this time was high and 71% of all cases were upheld in favour of the individual.

Complaints data
The Ombudsman publishes its complaints data every six months detailing individual businesses.

When looking at individual banks, top of the list for new complaints was Barclays with 23,703 between January and June. Next was Lloyds TSB with 12,235 followed by MBNA with 9,187.

When comparing the data from July to December 2011 there was an increase in complaints to nearly all the banks. Those to Barclays rose the highest and were up by 12,179 in this time.

Banking groups
However, what's interesting is that when you look at the banking groups, five had more than 8,000 complaints each.

Lloyds comes out top following a similar pattern to news last week published by the banks themselves about complaints data.

In total the Lloyds banking group, which includes brands such as Bank of Scotland, Scottish Widows and Halifax, received 27,745 new complaints. This is a rise from 20,310 from the previous six months while (as a group) Barclays wasn't much better with a total of 24,457 new cases.

The top ten most complained about banks


Number of complaints Jan – July 2012

Difference from the previous six months

Those relating to PPI

Barclays Bank Plc




Lloyds TSB Bank Plc




MBNA Europe Bank Limited




Bank of Scotland Plc (part of the Lloyds group)




HSBC Bank plc




Black Horse Limited (part of the Lloyds group)




Capital One (Europe) plc (part of the Lloyds group)




Santander UK




Nationwide Building Society




National Westminster Bank Plc (part of Royal Bank of Scotland)




*source: FOS

What is PPI?
This type of insurance policy, which is bought to cover repayments of a loan should you become ill or unemployed, has dominated the headlines over the past couple of years. This is because thousands of policies were mis-sold and the banks have had to pay out millions in compensation to rectify this.

Although it's free and easy to apply for PPI compensation if you think you've been mis-sold, thousands of claims management firms have popped up offering to do this for people – for a fee.

These companies have also been accused of filing thousands of false claims with little evidence which has added to the number of PPI cases the banks are dealing with.

How to complain to the FOS
Nearly everyone I know has cause for complaint about their bank and if you're in this situation the first port of call is going to the bank directly.

Get the name of everyone you speak to and document all the conversations. You can then complain to them in writing and you'll have to wait up to eight weeks for a response. If you've not heard anything by then, or you're not happy with the response you have had, you can head to the FOS.

It will look into your complaint for you after you've sent off all the details and if the complaint is regarding PPI you'll need to include an extra PPI customer questionnaire.

Is your bank in the top 10 list and if not should it be? Let us know in the comments box below.

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Britain's most complained about banks

More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.

The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!

(Pictured: Martin Lewis after the PPI payout ruling)

Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.

Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.

While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.

You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.

Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.

A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!

While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.

Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.

If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.

The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.

Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.

In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.

"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."

The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.

When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.

When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.

Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!

The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.

About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.


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