PPI fuels surge in complaints about banks

Marion Dakers
BANKS defended their customer service reputation yesterday as figures showed that complaints have soared nearly two thirds in the last six months, fuelled by the payment protection insurance (PPI) scandal.

The Financial Services Authority received a whopping 3.6m complaints in the first half of the year, as grievances lodged about PPI more than doubled to 2.2m.

Firms have so far paid out close to £3bn to customers who were missold PPI, out of around £10bn that has been set aside.

According to the FSA’s figures, the banks are upholding around two-thirds of PPI issues, a greater proportion than for other complaints.

Banks have already noted that the proliferation of claims management companies, which advertise help for customers claiming back payments for mis-sold PPI, has sent the number of complaints skyrocketing.

Peter Vicary-Smith, chief executive of consumer group Which, said the figures confirm that “PPI is now the biggest financial scandal of all time”.

“The banks must set aside more money for PPI claims and make it easier for customers to get back what they are rightly owed, without any hassle,” he added.

But the British Bankers’ Association said “core complaints”, or those that involve current accounts, have fallen 13 per cent to 323,955 in the last six months, and risen around three per cent on a year ago.

“There will always be instances when things go wrong: when they do, banks are committed to ensuring all complaints are dealt with as fairly, swiftly and effectively as possible,” it said in a statement.

The banking brand that attracted the most complaints was Barclays, with 442,266 lodged in the first half of the year.

But Lloyds Banking Group, which encompasses Lloyds TSB, Bank of Scotland and Halifax among others, received almost 800,000 complaints.

Meanwhile complaints about investments rose from 69,089 to 82,124 over the half-year.