Author Mark Richards
The Financial Conduct Authority has published some ‘performance’ tables on the banks. ‘Lack of performance’ might be a better description when looking at the complaints about banks…
The financial services industry loves its league tables. “Look,” says the eager young salesman, “This table shows that we are top out of 18 household name companies,” as he conveniently forgets the other 33 his marketing department have missed off…
So it’s always good to see an objective table. The Financial Conduct Authority has no sales targets to meet and no shareholders to please – so we can rely on its performance tables as models of impartiality. And now it has published a table where you very definitely want to be at the bottom of the league table.
Complaints about banks
For the first time, banks have been forced to report all the complaints they have received. That is not a customer expressing mild displeasure: that is someone going to the trouble of making a formal complaint, which the bank duly acknowledges. Previously, complaints resolved within three days did not have to be recorded: now, the FSA must be notified of all complaints.
Who is at the top of this league of shame? Barclays – and yes, that would sadly be the same Barclays who last week announced that their profits for the first quarter of the year had more than doubled to £1.68 billion. Chief Executive Jes Staley said it had been “another quarter of strong progress towards the completion of the restructuring of Barclays.”
Unfortunately, Mr Staley had nothing to say about the 438,000 complaints Barclays received in the last six months of 2016. Just let those figures sink in: that is 2,400 complaints a day, assuming people are complaining 7 days a week. If we are churlish enough to limit complaints to standard bank opening hours, then Barclays was receiving 420 complaints every hour. Even for a bank with branches up and down the UK, that is a staggering number.
In horse racing terms Barclays won by a distance: it received 47% more complaints more than the next worst bank and was responsible for 28% of all complaints about banks in the six month period.
Plodding along in second place came Lloyds, with 297,000 complaints, followed by Bank of Scotland (also owned by Lloyds) with 267,000.
But clearly, Mr Staley’s job is good news. It was left to a Barclays ‘spokesperson’ to spin the bad news.
“We have been working hard to get our banking complaints down and are no longer the most complained about banking group.” He added, “But we know we still have more to do,” as he made an early bid for the ‘Understatement of the Year’ award…
What about insurance products?
You will not be surprised to hear that the banks’ insurance products also attracted a welter of complaints, with Payment Protection Insurance inevitably leading the way. And unfortunately, Barclays completed a miserable double, attracting 160,650 complaints about banks with its insurance products, again followed by Lloyds and Bank of Scotland. A surprise entrant at no. 4 in this list was British Gas, which received 75,000 complaints about the insurance products offered to customers.
The FCA should really have organised an Oscar-style ceremony, shouldn’t they? Other awards on the night went to Bank of Scotland for managing to make 22,000 mortgage customers complain, while the Prudential walked off with two gongs: most complaints in both the investment and pensions sector.
Was there any good news in the FCA’s report? Yes: smirking smugly in the corner was Volkswagen Financial Services. The company may have its problems with the emissions scandal, but the UK insurance arm received just 505 complaints about its products: maybe VW should stop making cars and start opening banks…
How do these figures compare with the Short Term Loans industry?
If there is any sector of the financial services industry that you would expect to receive complaints it is payday loans – High-Cost Short Term Credit (HCSTC) as the FCA terms it. The Financial Ombudsman Service recently published its review of ‘the problems we have seen’ for the year ending March 2016.
In that period there were 188,712 complaints about PPI – clearly aided and abetted by firms ringing and encouraging you to complain. This was 8% down on the previous year, as the number of people still eligible to complain inevitably decreased. Complaints about current accounts were up 66% to 58,724: complaints about consumer financial products rose 40% to 13,382.
How does the HCSTC industry compare to the mainstream financial sector? There were just 3,216 complaints in the year. Admittedly this was a sharp increase on 1,157 complaints in the year to March 2015 – but a large proportion of those complaints will very probably have originated from the fake solicitors’ letters sent out by Wonga.
There is also much more consumer awareness – and inevitable ‘catching up’ – about historical poor practices, prior to the FCA’s remit. But however you look at it, the volume of complaints are minimal compared to complaints about the banks and related products/ services. It is perhaps unfair to use PPI as a comparator, but for every complaint about an HCSTC product, there were 18 about a current account.
Is it really worth complaining?
‘All very well’ you may say, ‘But we are stuck with it. There is no use in complaining.’ Interestingly, new research from Go Compare suggests otherwise: not only should you complain, you should also take to social media to air your grievances.
Go Compare’s research indicates that complaining over social media is now a £65m a year ‘business’ with complainants receiving goods and gifts worth an average £32. That may not compensate you for overpaying on Payment Protection Insurance for five years, but it does indicate that there are more ways to complain than the strongly worded letter and that companies (even banks) do respond to public ‘naming and shaming.’
Clearly the more followers and influence you have on social media the more weight your complaint will carry: if you have a healthy following on Twitter financial services companies will be wary of the negative impact you can have on their reputation. Maybe I should ask JK Rowling (10.2m followers and rising), Kim Kardashian (51.2m) or even Barack Obama (87.2m) to complain on my behalf…