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September 3, 2009    

FSA reports surge in finance complaints

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by Kay Murchie
”FSA

For the first time ever, the Financial Services Authority (FSA) has published figures showing the number of complaints made to firms in the financial services industry in the 2006-2008 period.

The data has revealed an enormous increase in complaints about banking and loan products, revealing a 122% increase - from 608,620 at the beginning of the second half of 2006 to 1.3 million at the end of the first half the following year.

This included a 259% rise in complaints about overcharging, and a 71% increase in those complaining about poor customer service.

According to the FSA, credit card complaints rose from 73,500 to 151,000 during the period, while complaints about cash ISAs increased more than fourfold to 39,259 from 8,700.

Furthermore, complaints about current accounts were up 46% from 368,000 to 536,000, while general insurance complaints and other types of pure insurance rose to 127,000 from 62,000 - primarily due to the mis-selling of payment protection insurance (PPI).

Complaints about poor customer service in all financial firms increased by more than a quarter (28%) to 239,500 from 187,000.

FSA director Dan Waters comments: “Publishing this information will mean that consumers and firms can now see how many complaints the industry receives and how it deals with them.”

However, consumer group Which? describes the figures as a “poor reflection on the industry” and shows how many unhappy customers are out there.

Which? personal finance campaigner Phil Jones said: “Financial firms simply aren’t treating consumers well enough and things must change if the industry is to rebuild its reputation.”

A spokesperson for the British Bankers’ Association welcomed the figures and said: “Put in context, the proportion of reportable complaints is still very small at 3.5 per thousand products held.”

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