City Watchdog criticises banks over customer complaint handling
City Watchdog, the Financial Services Authority (FSA), has criticised the UK’s largest High Street banks for the poor way they handled their customers’ complaints.
Five of the banks, who have not been identified, have agreed to make “significant” changes to the way it handles complaints.
However, two of the banks are being investigated further and may receive large fines.
The FSA blamed senior management of the banks for not being sufficiently interested in their complaints procedures.
Dan Waters, the FSA’s director of conduct risk, comments: “While we found some good practice, there is clearly evidence of unacceptable standards of complaints handling in banks.
“Delivering change in this area is a major priority and we are determined to use all the tools available to us to ensure that banks comply with our rules,” he cautioned.
The banking industry receives about three million complaints a year and Eric Leenders of the British Bankers’ Association (BBA) agreed that an improvement needs to be seen.
“Clearly more needs to be done – that is why the BBA is working with the industry to bring all banks up to the standards of the best,” added Mr Leenders.
Marc Gander of the Consumer Action Group (CAG) said the FSA’s findings were not surprising.
He said: “The banks have employed a diffident and dismissive approach to customer complaints for many years.
“The entire attitude of the UK banking industry towards its customers needs to be overhauled,” he added.