A bank complaint made every seven seconds

Official figures from the Financial Services Authority (FSA) show that Britain’s biggest banks received a complaint every seven seconds between January and June, the largest number of complaints to date, says claims company PPI Reclaims.

Royal Bank of Scotland (RBS), Barclays, Santander, Lloyds Banking Group and HSBC collectively received PPI complaints from over 2.2 million people during the first six months of the year about a variety of issues ranging from mis-sold insurance to investments and mortgages.

Lloyds Banking Group – which includes Lloyds TSB, Halifax and Bank of Scotland – received the most with 858,850, an increase of 145% compared to the same period in 2011. State-backed RBS received 491,735 complaints, Barclays 442,266, Santander 240,597, and HSBC 170,926.

The British banking system has been beleaguered with scandals over the last few years and confidence in the banks has hit an all time low. The PPI mis-selling fiasco, which saw millions of customers targeted for useless payment protection insurance on their loans and credit cards, is set to cost the banking industry more than £9bn by the time all claims have been dealt with.

Then LIBOR rigging came to light, and Barclays was found guilty of artificially ‘setting’ the interbank lending rates for its own gain and fined £290 million. Other banks are still under investigation for their role in the LIBOR rigging, and it is not clear just how many individuals and businesses were out of pocket as a result, or what the final outcome of that will be. Barclays also still has to deal with an investigation by the Serious Fraud Office over a 4.5 billion cash injection from Qatari investors at the height of the recession.

Many of the high street banks have also had to deal with problems with their computer systems, leaving many consumers unable to pay for goods in shops or withdraw money from ATMs. The worst incidence was at Royal Bank of Scotland, when 12 million RBS customers were locked out of their accounts for up to a month, incurring rejected direct debits and late fees and charges.

A spokesman for the British Bankers’ Association said: “Banks take customer complaints very seriously and are working hard to ensure they offer customers high quality products and services. But, despite all efforts and in an industry which processes millions of transactions every single day, things regrettably can sometimes go wrong.

“No one likes to feel they have let their customers down but there is much to be learned from complaints data and our members will be using the information to help make things better.”

Dave Johnson, Marketing Director for PPI Claims Company Missoldppiclaims.info thinks that some of the problems stem from the way banks incentivise their staff. “At one time the face behind the counter was a genuinely helpful person, but somewhere along the way their jobs and bonuses became dependent on them selling products, and very often they had very little training with which to do so. With high sales targets being set, bank staff were trying to sell to everyone without considering someone’s suitability for a product. This lead to many of the cases of mis-selling that have been seen.

“At other levels of the banking system staff were encouraged to be unethical, which eventually over the years lead to an attitude that what they were doing was normal practice and often justified to make enough money for shareholders.

“Eventually as the average consumer began to feel the brunt of the policies bank staff were encouraged to operate by, it was inevitable it would have to end sooner or later.”