Bank Complaints Hit Record Amid PPI Scandal
Complaints about financial firms have surged to a record high as the effects of mis-selling continue to weigh on banks.
The Financial Ombudsman Service (FOS), which settles disputes between consumers and financial firms, said new complaints rose 15% to 327,035 between January and June over the previous six months.
That was driven by a 26% increase in complaints about payment protection insurance (PPI), where people were charged for loan insurance which they did not need or could not claim on.
The ombudsman said some lenders continue to drag their heels on repaying mis-sold PPI, causing "long waits and unnecessary delays" for customers.
Complaints about Lloyds Banking Group were almost five times higher than a year earlier, at 129,293.
They also rose 38% on the previous six months to make the part-nationalised lender the most complained-about group.
The FOS upheld 80% of complaints against Bank of Scotland, owned by Lloyds, while 86% of complaints against sister firm Lloyds TSB were also upheld in customers' favour.
Lloyds was fined £4.3m in February by the Financial Services Authority for delaying PPI compensation to 140,000 customers.
The group released separate figures showing complaints it received fell 36% to 548,403 in the first half compared with the year before - including a 39% drop in PPI complaints.
Barclays was the second-most complained about group in the FOS figures, with 44,223 cases lodged with the ombudsman, up 81% on a year earlier.
It was followed by Royal Bank of Scotland (RBS), responsible for 22,940 complaints and HSBC, which saw 18,444 complaints lodged with the regulator.
Complaints about PPI made up more than 80% of those received by the ombudsman, with new PPI complaints hitting 266,228.
FOS chief executive Natalie Ceeney said: "Disappointingly we are still seeing cases where businesses are not following our long-standing approach to PPI, resulting in long waits and unnecessary delays for consumers.
"But, more positively, we are seeing encouraging signs from some major businesses that are starting to recognise the value of getting things right for their customers - with an increased focus on sorting out problems and concerns as quickly as possible."
The banking industry has so far set aside more than £18bn to cover the cost of PPI - more than double the cost of the Olympic Games.
Customers typically complain directly to an institution before then appealing to the ombudsman if they are still unhappy.