Last updated: September 1, 2010 8:28 pm

Santander worst for banking complaints

Santander has emerged as the bank with the highest proportion of customer complaints in the UK, with gripes about its banking service flooding in at the rate of one every minute during the first half of this year.

The Spanish-owned bank received 216,158 complaints in the six months, making it the institution with the highest ratio of complaints to the number of customer accounts. Barclays was next with 195,956.

Lloyds Banking Group received the highest number of overall complaints but had a lower ratio because of its larger customer base.

Co-operative Bank, which prides itself on offering customers an ethical banking service, had the lowest ratio of complaints with just 2.1 for every 1,000 accounts. HSBC also had a relatively low number of complaints at 65,236.

The information on customer complaints at UK banks became available for the first time after the Financial Services Authority ordered the banks to publish the information on their websites by August 31.

Banks were required to break down complaints into five areas: banking, mortgages, insurance, pensions and investments.

Complaints about banking services made up the vast majority of consumer grievances. They ranged from minor issues such as chequebooks not arriving and long queues in branches, to more complex problems such as international payments not arriving on time.

But banks threw out a large number of complaints about unauthorised overdraft charges after the Supreme Court ruled in favour of the banks last year, resulting in a jump in the number of complaints closed.

Some banks were more likely to decide in favour of the customer. Barclays upheld a third of all complaints, while Bank of Scotland upheld 7 per cent.

The FSA has compiled data on complaints since 2006 but has previously stopped short of naming and shaming specific institutions. It is trying to improve the way banks handle complaints following a probe in April this year, which it said revealed “glaring problems that need to be addressed”.

Santander has experienced high levels of complaints following its takeovers of Abbey, Alliance & Leicester and Bradford & Bingley. It acknowledged that some customers were “experiencing more issues” because it was going through a period of growth and business integration, but said complaints were down by 7 per cent year on year.

Analysts said complaints were also being driven by the growth in social media websites and forums, such as Twitter. “The problem the banks face is not only massive consolidation and . . . downturn, but also consumers getting more used to the idea of sharing their voice,” said Kevin Mountford, banking analyst at Moneysupermarket.com.

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