Complaints filed against UK financial services firms dropped sharply by 15 per cent between January and June of this year, largely due to a long-awaited decrease in the number of PPI complaints. This marks an impressive 500,000 decrease from the second half of 2012.
An overwhelming 61 per cent of the complaints pertained to mis-sold PPI, even though new figures indicate that new PPI complaints fell by 18 per cent, nearly reaching 1.8 million.
Amid the scandal, banks have been ordered to reimburse anyone who has been mis-sold an investment, and they have set aside over £18 billion for the task. Although the Financial Ombudsman Service has been swarmed with complaints for a few years now, the complaints finally seem to be slowly subsiding.
In addition to fewer PPI complaints, credit card complaints also dropped substantially over the first half of the year. In total, firms experienced 164,134 complaints, down a remarkable 42 per cent from the previous six-month period. On the other hand, general insurance and personal pension complaints rose by six per cent.
Barclays Bank has suffered the most customer complaints during the period, logging more than 370,000, which is down 10 per cent from the second half of 2012.
MBNA, Lloyds, Santander, and Bank of Scotland round out the list of the five most complained about financial firms. However, like Barclays, each firm received fewer complaints than they did during July through December of 2012.
It is also important to note that this data does not display the number of complaints a firm receives in proportion to the size of its customer base. Therefore, large banks and firms with the lion’s share of customers always sit atop the list.
According to Ian McConnell, a PricewaterhouseCoopers financial services partner, “The fall in customer complaints is expected to continue over the coming months.”
The numbers suggest that the PPI issue may be on the downward slope, with the complaints process running much more efficiently.
However, financial firms only upheld 51 per cent of the total number of complaints they have received, paying customers £2.55 billion in redress. At £2.4 billion, nearly all of the payouts were for pure protection and general insurance products.
Last month, data collected from the Financial Ombudsman Service revealed that banks are still denying a substantial number of legitimate PPI complaints. However, ombudsmen have upheld more than 80 per cent of complaints filed against firms.