09Nov

The Financial Conduct Authority (FCA) has revealed that a record number of complaints were made about the UK’s financial firms during the first half of 2018. The official figure of 4,130,000 complaints represents a 10% increase on the equivalent figure for the second half of 2017, which was 3,770,000. The increase compared to 12 months previously is as high as 23%, and the period January to June 2018 represents the fourth successive half-year where complaint volumes have risen.

Although the 4,130,000 complaints were made against 3,161 firms, 235 firms account for 98% of the overall total.

Payment protection insurance (PPI) is still the most complained about area, although this product now accounts for less than half of all complaints, at 42% of the total. The half-year figure for PPI complaints was 1,718,650 – an increase of 11% on the previous reporting period and the highest PPI complaints figure for four years. The next most complained about products are current accounts (15%), credit cards (8%) and motor and transport insurance (6%).

PPI complaints may be on the increase as next year’s complaints deadline approaches, but the regulator says that this alone cannot account for the overall increase in complaint numbers. The FCA says that non-PPI complaints are up by 9% from the second half of 2017 and suggests that the recent well-publicised episodes of disruption to banking services are fuelling the rise in grievances.

The data also suggests that firms are still able to complete their complaint investigations within three business days in most cases. 58% of non-PPI complaints were closed within this timescale during the period January to June 2018, and the equivalent figure for July to December 2017 was similar, at 59%. PPI complaints are taking much longer to settle, with 11% remaining outstanding for more than eight weeks, the period within which firms should normally complete their investigations into a complaint.

Total redress paid from settled complaints was £2,570,000,000 (£2.57 billion), an increase of 9% on the second half of 2017. Several areas show high uphold rates, with 64% of PPI complaints, 62% of non-PPI insurance complaints and 53% of banking and credit card complaints decided in favour of the customer.

All of these figures come with an important caveat – it does not include data from firms that are only authorised to carry out consumer credit related activities. The FCA previously reported that credit card complaints accounted for 8% of the total, however these complaints would have been made against firms that carry out other activities besides credit, for example banking activities.

Not all of the UK’s credit firms have submitted full complaints data to the FCA following their authorisation process and the regulator will not be publishing aggregate statistics for all firms until they are all fully authorised and are all reporting their complaints data. This explains an apparent discrepancy between the FCA complaints figures and those of the Financial Ombudsman Service. The latter organisation has for some time been reporting massive increases in the numbers of complaints being made about payday lending and other credit activities.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:

“Firms need to be doing all that they can to reduce complaints. It is clear that firms need to look at the cause of the rise in complaints and address these issues to prevent further increases.

“It should be a priority for firms to ensure good consumer outcomes are achieved and they should be making sure that they are taking the right steps to treat customers fairly.

“We are encouraged to see that figures are showing that more consumers are making a decision on whether to complain about PPI.”

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