Lloyds hit with highest FCA complaints as finance firms fork out £240m
Lloyds Banking Group led the pack as the most complained about financial services group in the second half of 2025 as the industry forked out a near-quarter of a billion pounds to dissatisfied customers.
Across its subsidiaries, the FTSE 100 giant was hit with a storm of 187,516 grievances to the UK’s financial watchdog in the final six months of the year.
It’s flagship brand Lloyds Bank registered the lion’s share at 90,837 while its Edinburgh-based commercial lender Bank of Scotland clocked up 79,508.
The group serves around 28m UK customers making it the country’s largest financial services provider.
Santander came in second at 124,919, which boasts around 14m UK customers.
On a headline level, the financials services sector was only hit with a modest uplift in complaints, reaching 1.9m, up just shy of one per cent from the first half. It remains broadly in line with the multi-year trend of floating between 1.7m to 2m since early 2021.
Fewer complaints were upheld, with the portion of cases where the firm was found to be in the wrong dropping from 57.9 per cent to 55.5 per cent.
Firms paid a total of £236.2m in the period, a drop from the £283.7m paid in the first half of 2025. The average payout also dropped to £215 from £238.
Insurance complaints to FCA soar
Santander and Lloyds have become the most prolific cutters to their branch network, in moves which have sparked backlash from customers.
In the last two years the firm has shuttered nearly 500 sites, according to analysis from Lightyear, and in January laid out plans to close another 44.
Both Santander and Lloyds are among the firms with the most exposure to the motor finance scandal, which have caused a mountain of complaints for UK lenders in the last two years.
Lloyds has set aside £2bn for the car mis-selling saga, which relates to the use of ‘secret’ commission deals inked between car dealers and lenders. Santander is on the hook for £461m.
The Financial Conduct Authority (FCA) had placed a cap on car finance complaints, which is set to be lifted 31 May 2026. The pause has been in place since January 2024, when complaints volumes rocketed as concerns around the use of discretionary commission arrangements – ‘secret’ deals between car brokers and banks – emerged.
Complaints regarding motor and transport insurance saw the most dramatic spike in the period, surging by over a third to 340,000. This helped fuel a 10 per cent jump in insurance and protection complaints to 790,329.
Current accounts grievances still topped the list, though decreased to 492,149 from 541,493 in the first half.