The UK Financial Ombudsman Service (FOS) has, for the first
time, ‘named and shamed’ UK banks, insurers and credit card issuers
in terms of customer complaints in an effort to encourage better
self-policing. The move is further indication of a stiffening
regulatory environment in the UK in the wake of the financial
crisis.

In all, the FOS received 69,841 complaints in the first half of
the year. Lloyds Banking Group, the UK’s largest retail bank, was
the most complained about with 12,751 complaints (Lloyds TSB, 6,947
and Halifax Bank of Scotland, 5,804), while Barclays was the single
brand attracting the most FOS referrals with 8,283.

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The FOS upheld complaints against all of the
major UK-based banks in the majority of cases. Lloyds TSB again
posted the highest figure, with 81 percent of complaints against
the bank determined in favour of the customer.

Across the sector, the FOS upheld 61 percent of banking and
cards-related complaints, 41 percent of mortgage complaints, 70
percent of general insurance grievances and 42 percent of
investment-related complaints.

A spokesperson for the UK’s Financial Services
Authority told RBI it can flex its disciplinary muscles when it
concludes that any bank’s complaints data “might be an outlier
against their peers, such as in the volumes of complaints being
received or in their investigation of complaints”.

The spokesman added: “The number of complaints has to go down.
We expect firms always to treat their customers fairly and have
intensified our supervision so it places greater focus on testing
outcomes for consumers. We are currently reviewing the quality of
complaints handling in the major banking groups and expect to
report results in spring 2010.”

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Regulation

Top 10 – UK financial services
firms’ complaints at end of H1, ranked by new
complaints
 

Total complaints

% in favour of
customer(1)

Banking, credit
cards(2)

Mortgages(3)

Barclays

8,283

71

67

55

Lloyds TSB

6,947

81

54

58

Bank of Scotland(4)

5,804

52

51

40

Abbey

2,493

67

71

52

NatWest

2,379

60

54

45

HSBC

2,177

60

59

42

RBS

1,812

71

55

42

Alliance & Leicester

1,786

66

70

39

Capital One

1,744

91

87

n/m

Nationwide BS

1,149

41

43

28

(1) percentage of complaints found in
favour of the customer. Average for all financial services firms,
59%; (2) retail banking and credit card complaints found in favour
of the customer. Sector average, 61%; (3) mortgage and home loan
complaints found in favour of the customer. Sector average, 41%;
(4) includes Halifax Source: Financial Ombudsman Service