British banking complaints up 8% in first half of year

Complaints about Britain’s financial firms rose 8% in the first half of this year after a jump in new cases about packaged bank accounts, the UK industry’s watchdog said yesterday.

Packaged bank accounts offer a range of additional services, such as insurance policies, better deals on savings accounts or loans, and other perks, in exchange for a monthly fee.

Three major banks, Royal Bank of Scotland, Barclays and Lloyds, have set aside £732 million between them to compensate customers for possible mis-sold packaged accounts, raising concern it could build into another big compensation problem for the industry.

New complaints about payment protection insurance (PPI) products, in the six months to the end of June, totalled 94,091, down 10% from the previous six months but still accounting for 55% of all cases, Britain’s Financial Ombudsman Service said.

There was a 45% jump in the number of complaints about financial products other than PPI, mainly due to more complaints about packaged bank accounts brought by claims management companies, the ombudsman said.

That took total new complaints in the six months to 173,994, up from 161,649 in the July- December 2014 period. Some 57% of complaints were upheld in the consumer’s favour, the ombudsman said.