Facts on complaints ‘being hidden away’

Banks, insurers and other financial services firms have been accused of making it difficult for their customers to find out how many complaints have been lodged against them.

The accusations emerged this week after a new rule requiring companies to publish how many complaints they received over a six-month period came into force. Companies were required by the Financial Services Authority (FSA) to publish the data by August 31, along with the percentage of complaints processed within the recommended eight weeks and the outcome for the consumer.

The rule – which only applies to firms receiving 500 or more complaints over a six-month period – is designed to drive up standards in complaint handling, particularly at banks, where unacceptable practices were recently identified by the FSA.

The first round of figures published at the end of last month showed Santander was the bank with the highest ratio of complaints to the number of customer accounts. In the first six months of the year, it received 216,158 complaints – or about one every minute – about banking alone. Barclays had the next highest proportion with 195,956 complaints.

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.

Consumer groups said the publication of complaints data was a “welcome move towards real openness” but there were concerns that customers could not easily find the data.

“The majority of banks and building societies hide away their complaints data via a link on a ‘how to complain’ page deep within their sites, making the information difficult to find,” said Justin Modray, founder of Candidmoney.com, a financial information website. “It would be far more sensible if they were compelled to include a clear link to complaints information on the homepage of their websites. As things stand, I think the vast majority of customers would struggle to find it.”

Legal & General, which has 7m UK customers for life assurance, pensions, investments and general insurance plans, said it would consider publishing complaints data on its retail website “if it would benefit our customers”. The data is only currently available on its group website.

Consumer groups also said the new rules did not enable customers to see the full picture. “We would like to see all complaints data clearly broken down by individual brand and product, alongside details of how long it takes for complaints to be dealt with,” said Oliver Morgans, financial specialist at Consumer Focus, an independent consumer champion. “This will help consumers compare customer service.”

Others expressed concern that consumers were not given guidance on how to interpret the published data.

“Firms are required to set out the percentage of complaints that were upheld in the customer’s favour,” says Dominic Lindley of Which?, the consumer group.

“But you also need to look at data on complaints later overturned by the Financial Ombudsman Service (FOS) to get the full picture. Some firms are having their decisions overturned at the rate of 80 to 90 per cent. This would suggest that some firms are not dealing with complaints fairly.”

The FSA said that, later this month, it would be publishing an aggregated list of all the companies’ published complaints, in a consumer-friendly format. It estimated that 170-200 firms would be on this aggregated list.

The move to make companies publish their own complaints data comes after an FSA review found evidence of “unacceptable” complaint handling standards in the banking sector. Five banks assessed are changing the way they deal with complaints and enforcement action is being considered against two.

The FOS publishes its complaints data, which names individual businesses, every six months.