Lloyds TSB and MBNA are the worst of the major banks for wrongly dismissing complaints, new data published by the Financial Ombudsman Service reveals today.
Of the top 10 most complained-about firms, Lloyds TSB was the worst of the high street banks at dealing with customer complaints correctly. But it wasn't the worst of the major organisations, with MBNA taking that unwanted title.
It had 84% of complaints against it upheld in consumers' favour by the Ombudsman during the first six months of this year. Lloyds had 74%.
For the arbitration service to uphold a complaint, it must first have been thrown out by the firm in question. So those with the highest uphold rates against them are the institutions wrongly rejecting too high a proportion of complaints.
Barclays and NatWest hardly covered themselves in glory either, with more than half of complaints upheld.
Of the top 10 most complained-about businesses, Nationwide fared least badly, with 20% of consumers' complaints upheld.
The table below shows the uphold rates of consumer complaints against the top 10 most complained-about firms:
Top 10 most complained-about firms
|Firm||Complaints to Ombudsman||% upheld|
|Bank of Scotland||7,836||48%|
|Data from 1 Jan 2012 to 30 June 2012|
The overall number of new complaints to the Ombudsman increased by 27% in the first six months of this year compared to the last six months of 2011, largely due to more payment protection insurance (PPI) mis-selling gripes.
The 85,562 new PPI complaints made up 63% of all the grievances received by the Ombudsman during the first half of 2012. PPI generated 49,419 complaints in the last half of 2011.
Between 1 January and 30 June, the Ombudsman received 135,170 new complaints about banks, insurance companies and investment firms. The figure for the last six months of 2011 was 106,193.
Falling uphold rates
The number of complaints upheld in the consumer's favour did generally fall in the first six months of the year, compared to the previous six months.
But the Ombudsman says this isn't due to better complaints handling by banks and insurance companies.
Instead, it says the uphold rate was artificially high between July and December 2011 as the Ombudsman was able to 'mass close' PPI complaints that had been awaiting decisions since the banks' failed judicial review.
The Ombudsman also says many disputes have become stuck, creating a backlog of unresolved complaints as more firms and customers appeal against decisions.
What Lloyds and MBNA say
A Lloyds spokesman says: "Once complaints about PPI have been removed, the latest data published by the Financial Ombudsman Service shows that Lloyds Banking Group continues to get more customer decisions right than any other major bank, with the change rate for decisions for complaints about banking products at 24%, compared to 39% in the same period last year.
"PPI complaints relate to historic processes and procedures, which is why these figures do not demonstrate the same significant progress seen in other product areas. For a short period at the end of last year, we experienced delays in distributing PPI compensation payments to customers. This issue was swiftly resolved, but it is likely to have had an impact on the rates published today."
An MBNA spokesman says: "We know from detailed analysis that the primary drivers of many of our complaints are legacy issues, in particular PPI, which continue to be inflated by aggressive claims management company activities.
"We are continuing to analyse the root causes in detail and we expect to drive down the number of complaints going to, and being upheld by our regulators as a result."