Complaints in the UK against companies in the financial industry have reached their highest level since records began despite regulators attempting to reduce bad conduct in the sector after new laws were launched after the financial crisis.
The amount of complaints reported against bank accounts were over double during the last quarter whilst pension plan complaints also surged according to the Financial Ombudsman on Thursday.
Caroline Wayman, the Chief Ombudsman said:
“We mustn’t lose sight of the lives and livelihoods behind every complaint.”
The amount of complaints and seriousness is closely monitored by Andrew Bailey, the Bank of England Deputy Governor. Bailey will be heading the Financial Conduct Authority (FCA) from July which sets regulations at banks and he has stated it will be one of his priorities to ensure changes are made to the culture at banks.
The main banks responsible for 56 per cent of complaints were Lloyds, Royal Bank of Scotland, Barclays and HSBC.
Over the past year the ombudsman received 340,899 complaints increasing slightly on the year prior and double that during the peak of the global financial crisis. The ombudsman supported around half of the resolved complaints.
The complaints weaken banks’ claims that they have reformed the industry after putting aside over 40 billion pounds covering claims and fines since the financial crisis. It’s estimated that for every 28 adults in Britain, one will contact the ombudsman to discuss a problem with a financial services business whilst 5 of the calls with become a formal complaint.
The biggest complaint based on financial products was Payment protection insurance (PPI) which reflects how Britain’s costliest scandal continues to hit the industry. During the year PPI complaints totalled 188,712, amounting to 4,000 a week and created half of the ombudsmans work, dropping slightly by 8 percent compared to last year.
Complaints regarding packaged current accounts also know as fee-paying accounts at banks rose by 107 percent reaching over 44,000, with payday loans seeing a 178 percent rise to 3,216.