Last updated: April 9, 2014 2:31 pm

Consumer financial complaints down 15%

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FCA logo©David Parry/ FT

A big fall in complaints about the mis-selling of payment protection insurance has led to a fall in the overall number of customer complaints against financial companies.

Data from the regulator – the Financial Conduct Authority – show that 15 per cent fewer were reported in the last six months of 2013, compared with the first half of the year.

However, excluding PPI – which continued to account for the majority of the 2.48m new complaints – customer complaints fell by only 3 per cent.

There were 1.39m relating to PPI, a loan insurance product sold to bank customers who in many cases did not need it. This was 22 per cent fewer than in the first half of 2013. PPI-related complaints peaked at 2.17m in the second half of 2012.

Complaints about other insurance products and current accounts rose between July and December.

An 8 per cent increase in the number relating to current accounts, to 303,110, comes in spite of a government-backed initiative that has allowed customers to switch to a new bank more easily since September 2013.

The data showed that overall complaints against most high street banks are down.

“This is an indication that firms seem to be putting customers at the heart of their business, however, there is clearly more for us all to do to show consumers that their interests come first,” said Martin Wheatley, chief executive of the FCA.

Of the big banks, HSBC saw the largest fall in complaints, of 24 per cent, while Barclays saw a 17 per cent drop. Santander, which was fined £12.4m last month for providing unsuitable investment advice to branch customers, received 22 per cent fewer complaints.

At Lloyds Banking Group, which received the largest number – 493,097 – Bank of Scotland reported an 18 per cent fall, while the Lloyds Bank brand – whose figures include TSB – saw a 1 per cent increase.

According to a like-for-like measure, Lloyds says its Halifax division recorded 0.8 complaints per thousand accounts. This contrasts to 3.7 complaints per thousand accounts for competitor Santander, the company says.

Nationwide, the UK’s largest building society, saw a 37 per cent increase in customer complaints to 87,937.

Richard Lloyd, executive director of consumer group Which?, said: “It’s good to see the number of complaints overall is falling but the figures are still far too high, and it’s unacceptable that complaints about current accounts have increased.”

The list of investment-related complaints, which were down 9 per cent overall, was topped by Hargreaves Lansdown, the largest direct-to-consumer investment platform. The number of reported complaints against the fund supermarket rose fivefold to 3,317 in the second half of 2013.

Adrian Lowcock, senior investment manager at Hargreaves Lansdown, attributed the increase to the privatisation of Royal Mail last October.

Royal Mail-related complaints from customers who were unhappy with their allocation and the sale process accounted for 84 per cent of Hargreaves Lansdown’s complaints in this six-month period, said Mr Lowcock. The company took on 27,000 customers ahead of the flotation.

In the same period, complaints against Barclays Stockbrokers – which was also involved in the Royal Mail flotation – increased 9 per cent to 1,920.

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