04May

The Financial Conduct Authority (FCA) has reported that some 3,040,000 complaints were made against authorised firms during the second half of 2016. This represents a significant increase on the equivalent figure of 2,050,000 for the first half of the year, however the figures were always going to show a significant increase as a result of a recent change to the regulator’s complaints rules.

Firms now have three business days in which to make an initial attempt to address a complaint to a consumer’s satisfaction, whereas previously the formal complaints process had to be used if the matter could not be resolved within one day. Firms also now need to include complaints resolved using this method in their complaints data returns for the first time.

895,110 (29%) of the complaints concerned payment protection insurance (PPI), 514,000 (17%) were about current accounts and 313,000 (10%) related to credit cards. Packaged bank accounts now have a separate category in the data, so the 172,000 complaints about this product are not included in the current account figure.

Despite the change in the way the data is collected, the number of PPI complaints was actually down from the 927,631 figure reported for the first half of the year – in practice very few PPI mis-selling complaints will be resolved within three business days. The FCA data also shows that, during the six-month period, some 43% of complaints were resolved within three days, but this figure rises to 63% when PPI complaints are excluded.

Although most PPI complaints concern mis-selling, across all product categories there were actually slightly more complaints concerning administration and customer service than there were regarding ‘advising, selling and arranging’.

Barclays was the firm with the most complaints, with 438,237, although 564,385 complaints were made to the various institutions that comprise Lloyds Banking Group.

Firms paid £1.9 billion in redress in the period from July to December, of which £1.6 billion (84%) was PPI compensation. The total PPI compensation paid by the industry to date is around £26.5 billion.

Of the complaints closed by firms in the second half of 2016, 60% were upheld, up from the 57% decided in the customer’s favour between January and June.

The firms upholding the highest proportion of complaints in each category were:

• Banking and credit cards – Cheltenham & Gloucester (89%)
• Decumulation and pensions – Skipton Building Society (100%)
• Home finance – Legal & General Partnership Services (83%)
• Investment – HBOS Investment Fund Managers (85%)
• Insurance & pure protection (which includes PPI) – Santander Cards UK (96%)

The FCA believes that the rule change has resulted in more meaningful complaints data being obtained. Christopher Woolard, Executive Director of Strategy and Competition, justified the change by saying:

“Consumers want a simple way to complain that does not leave them out of pocket. And they want to be assured that their concerns will be dealt with fairly and quickly.

“These data will provide us with improved intelligence on complaints including new detailed data to show where industry is potentially failing consumers at product level”.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.