Complaints against lenders jump 40 per cent

02/11/2009

The number of complaints lodged against banks and other financial institutions rose to over 1.5 million during the first six months of this year.

The Financial Services Authority (FSA) has revealed that complaints about the way banks and building societies treat those struggling with mortgage payments shot up by 40 per cent in the first half of the year.

An area of particular concern is payment protection insurance (PPI), with more than 334,443 complaints lodged in the first six months of the year, a rise of more than 72 per cent since the first half of 2006.

It comes after the FSA fined insurance firm Swinton £770,000 for serious failings in the way it sold PPI and ordered it to refund 350,000 people who had been mis-sold the cover.

Debt solutions firm EuroDebt believes that, despite the best efforts of the British Banking Association [BBA] and other trade associations to bolster consumer confidence in financial institutions, the immense volume of complaints around mis-selling of products, over-charging and poor advice demonstrate the very real concerns that consumers have, especially if they are in financial difficulty or have been adversely affected by purchasing a financial service.

This is not helped by the rise of the ‘ambulance chasers’ constantly looking for ways to exploit loop holes in current consumer credit legislation or agreements.

The FSA needs to be very clear on what ‘treating customers fairly’ really means in practical situations. It will be interesting to see how clients are dealt with following the demise of card issuer Monument, formerly part of Barclays, where they are now asking clients to repay their outstanding balances.

Many people judge the performance of their ‘trusted’ financial service providers when the chips are down. The evidence isn’t encouraging and many people are now having to seek professional debt advice to deal with their financial problems.”

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