Employee Engagement

Barclays bank was the most complained about financial firm in the first half of this year, according to the City watchdog, a rebuke that comes in the same week it was named as the most-fined financial institution in Britain.

The bank received just shy of 280,000 complaints in the first six months of 2014, official figures from the FCA show, with the vast majority of these about payment protection insurance followed by general banking products. This is four times more likely than Nationwide

Earlier this week Barclays confirmed it has paid a £38m penalty for failings over the protection of client’s assets. It was the sixth time the bank was fined in the past five years and boosts its total fine tally to £134m in Britain. An FCA spokesman said: “We have fined Barclays more times than any other firm.”

Matt Hammerstein, head of client and customer experience at Barclays, said: “Our banking complaint figures reflect some significant one-off changes in the first half of 2014. We’ll never stop striving to improve service and prevent the need for complaints, and we believe this approach will deliver real change in customer satisfaction for the long-term.”

Complaints about Barclays were down 10% since the second half of 2013, while complaints about financial firms overall were down by 5%, the FCA said.

Customers of Bank of Scotland and Halifax, however, did not contribute to this fall in complaints. The banks, which are jointly the second most complained about this year, saw complaints rise by 46%. This was the only increase at a time when third, fourth and fifth most complained about financial firms Lloyds Bank, NatWest and Santander saw complaints fall.

The two banks, which share a banking licence so submit complaints data together, blamed the rise on a push last year to contact customers about PPI.

“The group continues to proactively manage the issue of PPI complaints in order that customers can receive redress if they have been mis-sold,” said Martin Dodd, of Lloyds BankingGroup, the parent company. “This is an ongoing process and we will continue to review all claims in an in-depth manner that produces fair outcomes for customers.”

Bank of Scotland and Halifax also blamed the introduction of new rules earlier this year that make it tougher for borrowers to take out a mortgage. The changes, which follow the City regulator’s mortgage market review, mean borrowers are asked to give more details about their spending when they apply for a home loan. The rules came into force in April but most banks and building societies had already started implementing them.

Complaints about home finance products, which include mortgages and equity release plans, rose by 8% to reach its highest level since 2007 in the six months from January to July.

The Financial Ombudsman Service (FOS), which deals with complaints once customers have exhausted a firm’s internal complaints process, said this tallied with its figures that show a 3% increase in gripes about mortgages in the same period.

“This may be related to the economic climate as homeowners examine their expenditure or come to renew mortgage deals,” an FOS spokeswoman said. “Typical areas of complaint include financial difficulties and affordability issues, and disputes over valuations.”

PPI remained the most complained about product in the first half of this year, according to the FCA, though complaints were down by 11% compared to the last half of last year. The next most complained about product was current accounts, which saw a 3% rise from the last half of last year, bringing the number to 319,505.

This rise was largely driven by a 137% rise in complaints about the advising, selling and arranging of current accounts compared with the second half of 2013, and a 171% rise compared to the first half of last year, the FCA said.

The FOS said it has also seen a rise in complaints about current accounts.

“This is largely driven by issues with packaged accounts, with people often feeling they have been mis-sold the account or have paid for it without their knowledge,” the FOS said. “Others have complained when they have come to claim on the travel insurance that comes with the account they find were not covered by the insurance in the first place.”

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