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Written by rosalind renshaw

The number of complaints received by the Financial Ombudsman Service soared 54% to almost 150,000 in the first half of the year – with most about mis-sold PPI.

One consumer watchdog branded the figures unacceptable and called for action to make the banks more accountable, whilst Which? accused the banks of being ‘blasé’.

The complaints figure for the first half of this year compares to 97,237 cases in the second half of last year.

Two-thirds (98,632) of the 149,925 new complaints received between January 1 and June 30 this year were PPI-related.

Lloyds, Barclays, HSBC, Royal Bank of Scotland and US credit card provider MBNA accounted for just under half of all the new cases, each generating over 10,000 complaints.

Lloyds topped the complaints table with 19,569 new cases, followed by Barclays with 16,864 and Lloyds’ main subsidiary Halifax / Bank of Scotland with 13,021.
MBNA was the subject of 12,500 complaints, up from just 3,430 in the second half of last year. Of the complaints dealt with against MBNA, 87% were upheld – the highest proportion. The overall rate of complaints being upheld in favour of consumers was 47%, down from 53% in the second half of last year.

Santander was the only major bank which had a slight fall in the total number of complaints reported to the ombudsman, down from 6,759 to 6,434.

Natalie Ceeney, chief ombudsman, said: “These latest figures show a significant increase in the number of new PPI complaints referred to the ombudsman during the first half of 2011.

“This period coincided with the time when most of the high street banks and some other financial businesses had put PPI complaints on hold, because of their legal challenge against the ombudsman service and FSA.

“As a result, complaints in this period about PPI were harder fought, and harder to resolve – particularly if we found in favour of a consumer. This data therefore gives only a partial view on the cases which we were working to resolve over this period.”

Commenting on the complaints figures, Oliver Morgans, financial services expert at statutory watchdog Consumer Focus, said: “These figures provide yet more evidence about our banks’ inability to treat PPI complaints fairly.

“There has been a massive surge in complaints about this issue, with some banks showing a totally unacceptable uphold rate. Even the seemingly better performers appear to be unnecessarily stringing out complaints, challenging decisions and denying consumers compensation.

“All in all, the banks should be ashamed at their continuing failure to tackle the PPI issue. Following the court case we expect the next set of FOS figures to show that PPI complaints are being dealt with properly by banks, without consumers needing to contact the ombudsman.”

Consumer Watchdog called for more complaints data to be published, with complaints comparisons made available online, and stronger enforcement by the FSA against poor complaints handling.

Which? executive director Richard Lloyds said: “If the next round of complaints data doesn’t show a dramatic improvement, then the FSA must take tough enforcement action against banks whose complaints handling isn’t up to scratch.”


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