Aug 31 2012
Customer complaints to banks soared in the first half of this year due to rocketing numbers of cases relating to the mis-selling of payment protection insurance (PPI), new figures show.
Around £10 billion has been set aside by banks to cover claims being made by people who were sold insurance they did not want or need, in what is predicted to become the biggest consumer financial scandal of all time.
Figures released by various banks show the massive impact the widespread scandal is having on their complaints levels.
Lloyds Banking Group, Britain's biggest retail bank, received around 860,000 complaints in the first six months of this year, a 145% increase on a year ago. Out of this figure, PPI-related complaints more than trebled year-on-year to reach almost 738,000.
Lloyds said that in the first half of 2012, it delivered an 18% reduction in complaints compared to the same period last year, excluding PPI-related complaints. It said the group's banking complaints over this period have fallen from 1.7 complaints per 1,000 accounts to 1.4, indicating it is on track to achieve its target of reducing our complaints per 1,000 accounts to 1.3 by the end of 2012.
Complaints to NatWest doubled year-on-year, with 295,934 complaints in the first half of 2012. Some 209,000 of these complaints related to PPI, and if PPI were removed from the figures, complaints would have been down by 12%. NatWest's PPI complaints have been doubling every six months since the beginning of last year, but they are likely to eventually stop climbing as it has already paid out around £700 million of its £1.3 billion provision.
Royal Bank of Scotland (RBS) received 195,801 complaints in the first half of this year, of which 156,000 related to PPI. This compares with 68,414 complaints RBS received in the first half of last year, and even when PPI is stripped from the RBS figures complaints are still up 3% year-on-year.
A spokeswoman for RBS Group said that its recent IT meltdown which hit NatWest, Ulster Bank and RBS, which are all part of the same banking group, had placed an extra strain on the ability of staff to clear up customer complaints quickly.
Customer complaints to Barclays are up nearly 80% year on year due to the surge in PPI cases. The bank's figures show that 442,266 complaints were opened in the first half of this year, a 76% increase compared with the first six months of last year.
Paul Maddox, managing director of customer service at Barclays, said that bogus complaints brought by claims management companies (CMC) have "significantly distorted" the figures. More than a third of CMC complaints were shown to be "vexatious", which slowed the speed at which Barclays could deal with genuine claims, he said.