First Direct tops customer survey

First DirectFirst Direct has topped a satisfaction survey of current account customers for the third year in a row, while Bank of Scotland was named the worst performer.

MoneySavingExpert.com warned its findings indicate that several high street giants still need to up their game as new rules are about to come in which will make it much easier for their customers to ditch their existing bank.
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Less than half of current account customers with Barclays, NatWest/RBS, Lloyds TSB, HSBC and Bank of Scotland said they got a great service from their bank.

The consumer help website, which compiled its research from the opinions of more than 8,000 current account customers, also found that Santander and Halifax have made some strong improvements in recent months.

The findings come just weeks before new rules to take the hassle out of switching current accounts come into force, which are expected to inject more competition into the market.

Providers often use the relationship they have with their current account customer to sell them other products such as mortgages or credit cards. From September 16, the time it takes to switch a current account will be cut from up to 30 working days to seven and incoming and outgoing payments will automatically move to the new account.

More than nine out of 10 (93%) First Direct customers described the service they get from their bank as "great". The internet and telephone-based bank is owned by HSBC - which came second from bottom in the survey.

First Direct came out on top in a similar study run by consumer group Which? in July. Earlier this month, it upped an incentive for people to switch to it from £100 to £125.

At the other end of the spectrum, more than one fifth (21%) of Bank of Scotland current account customers rated the service provided by the bank as "poor", while just over a third (36%) said they got a great service. The bank was rated as "OK" by 43% of customers.

A Bank of Scotland spokesman said that getting customer service right is at the "heart" of its strategy and the level of banking complaints it is seeing has been falling.

Santander, which was languishing at bottom of the table one year ago, has moved into fifth place for its accounts generally and was also in third place for its flagship 123 account, which offers cashback on household bills paid through the account as well as in-credit interest.

Santander recently announced it is simplifying its current account range, including moving customers off its older "packaged" paid-for current accounts, which it stopped selling more than a year ago.

Earn £100 or up to 5% interest by switching to another bank

Halifax also saw a significant jump in the proportion of customers describing the provider as "great" - up from 38% six months ago to 53%.

Halifax's strategy in preparation for the new switching rules has been based around trying to make sure customers are kept happy once they have changed to it.

It is offering customers £100 to switch, as well as a fee-free overdraft for the first six months. Halifax has also recently cut the amount of cash people need to place in its Reward and Ultimate Reward current accounts in order to be paid £5 into their account each month from £1,000 to £750 a month.

Dan Plant, head of editorial at MoneySavingExpert, said the findings show that several major banks need to "step up their game" as the new switching service is likely to bring lots of offers from providers trying to tempt new customers in.

He added: "We are now just weeks away from the new switching rules so there really is no excuse to put up with bad accounts with even worse service."

:: Here is how the current account providers were ranked in terms of customer service. The name of the provider is followed by the percentage of customers who thought service was "great", followed by those who thought it was "OK" and lastly, those who thought it was "poor". The figures in brackets show how the providers performed when the same study was carried out in February. The figures have been rounded:

1. First Direct, 93% (91%), 6% (7%), 1% (2%)

2. The Co-operative Bank (including Smile), 76% (78%), 18% (18%), 6% (4%)

3. Santander (123 account only), 75% (63%), 20% (28%), 5% (9%)

4. Nationwide, 73% (66%), 22% (28%), 5% (6%)

5. Santander (all accounts), 62% (44%), 27% (37%), 11% (19%)

6. Halifax (Reward account only), 56% (n/a), 35% (n/a), 9% (n/a)

7. Halifax (all accounts), 53% (38%), 37% (43%), 10% (19%)

8. Yorkshire/Clydesdale Banks, 51% (n/a), 40% (n/a), 10% (n/a)

9. Barclays Bank, 48% (41%), 40% (45%), 13% (14%)

10. NatWest/RBS, 48% (40%), 39% (44%), 14% (16%)

11. Lloyds TSB, 47% (44%), 40% (42%), 13% (14%)

12. HSBC, 44% (42%), 42% (44%), 15% (14%)

13. Bank of Scotland, 36% (35%), 43% (43%), 21% (22%)

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First Direct tops customer survey

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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