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Huge rise in bank complaints
Huge rise in bank complaints
Banking complaints have shot up in the past six months, but which is the worst offender and what's the best alternative?
Banks are not exactly popular at the moment, a fact that was reinforced by figures confirming a massive jump in the number of complaints received between January and June this year.
Top of the chopping block was Lloyds Banking Group - which includes brands such as Lloyds TSB, Bank of Scotland, Halifax and Scottish Widows - which received 860,026 complaints in the first six months of the year. That's a rise of 146% compared to the same time period a year ago.
The part state-owned Royal Bank of Scotland also saw a hike of 128% in complaints bringing the total to 491,735, Barclays received 442,266 – a 76% increase.
Every six months all banks are required to submit their complaints figures, while the Financial Ombudsman Service (FOS) also releases data (due out later this month) regarding the complaints it receives.
The recent batch of results shows a huge leap in the number of customers complaining about our banks. And despite the recent scandals over computer glitches and libor fixing, the majority are still related to the mis-selling of payment protection insurance (PPI).
In fact the total complaints received by all the five leading banks - Lloyds Banking Group, Barclays, HSBC, RBS and Santander - reached just over 2.2 million and of these 1.5 million were related to PPI.
The most complained about banks
Total complaints between January – June 2012
Increase from a year ago
Those relating to PPI
Lloyds Banking Group
Payment protection insurance
PPI is a type of insurance which is taken out to cover repayments of a loan should you become ill or unemployed. But thousands of policies were mis-sold and the banks have now had to pay out millions in compensation.
As a result there has been a rise in the number of claims management firms working in this area. These companies operate by encouraging customers to lodge claims and then take a hefty cut of whatever compensation is rewarded as payment.
However, claiming back PPI when you have a legitimate case is easy and free and you don’t need to go through one of these companies. For more information read our step-by-step guide to claiming back PPI compensation.
The actions of these companies have greatly pushed up the number of PPI complaints the banks have to deal with and many are being filed without any proper evidence. Santander, for example, said around 40% of the PPI claims it has received are not legitimate
How to complain about your bank
Clearly we are all becoming more prepared to complain to our bank, rather than simply accepting bad service. If you’ve got cause for complaint against your bank, there are certain steps you need to follow to get the best results.
Firstly you need to know your bank’s complaints procedure and follow this. Generally you’ll need to contact it first and then wait for eight weeks before taking things further. In this time if it hasn’t responded to you, or you’re not happy with the response, you can then speak to the FOS.
Our article on increasingly your chances at winning a complaint will give you a comprehensive guide to the process.
Alternatives to the high street banks
As the complaints soar, many people are choosing alternative places to keep their money. In a recent survey three quarters of consumers said they would choose John Lewis over their bank, while 46% would go for Amazon.
However, there are many trusted financial institutions around which can provide a better home for your cash such as credit unions, building socities, peer-to-peer lending and even supermarkets.
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