Thursday, August 26, 2010

British bank is deluged with over 2,000 complaints a day: But the bailed-out bank rejects 90%

This is just what I would expect from my own experience of Britain's hopelessly bureaucratised banks. They do tend to inspire thoughts of bloodshed --JR

Britain's biggest bank is receiving more than 2,000 complaints from angry customers every day, it admitted last night. Lloyds TSB - which is 43 per cent owned by the taxpayer after a multi-billion pound bailout to save it during the credit crunch - said it had received 300,000 complaints in the first six months of the year.

But just one in ten ended in an apology or compensation for the let-down customers - and an astonishing 90 per cent were dismissed.

Banks have been ordered to publish the full extent of their customers' dissastisfaction by the Financial Services Authority.

Earlier this year, nationalised Royal Bank of Scotland admitted it was receiving more than 1,600 complaints every day. But in contrast to Lloyds TSB, it upheld eight out of every ten - raising questions over how there can be such a disparity.

The figures from the Lloyds group, which also includes Halifax, Bank of Scotland and Cheltenham & Gloucester, were described as 'disappointing' by consumer group Which?.

The bank also revealed that it had 'closed' an astonishing 600,000 outstanding complaints this year, ending a huge backlog.

Many of those were from customers complaining about overdraft charges whose cases had been put on hold until the Supreme Court ruled on whether banks had to pay compensation for overcharging their customers. The banks won their case against the Office for Fair Trading - and Lloyds TSB appeared to have taken that as a cue to simply dismiss hundreds of thousands of pending complaints.

That was despite many complaints separately being upheld by the banking ombudsman.

The figures published yesterday showed:

* The former HBOS banks - which also include smaller brands Birmingham Midshires and Intelligent Finance - received 68,280 complaints from customers unhappy at how their accounts or credit cards were handled in the first six months of the year, and upheld just 7 per cent.

* The same division received 36,121 from disgruntled insurance customers - and upheld almost 68 per cent, suggesting massive problems in its insurance products.

* Of the 103,686 Lloyds TSB bank and credit card customers who complained about their experience, just 12 per cent were not dismissed.

* But 54 per cent of the 41,874 who complained about insurance products had their complaints upheld.

The giant Lloyds group was formed when then prime minister Gordon Brown brokered a deal at a Whitehall drinks party with Lloyds TSB chairman Sir Victor Blank to take over HBOS, which was on the verge of collapse.

Lloyds TSB has around 12million current account customers and Halifax, which was recently named the worst bank for customer satisfaction by consumer group Which?, has about 10million current account holders.

Dominic Lindley, of consumer champion Which?, said: 'It's disappointing to see a taxpayerbacked bank doing such a poor job at keeping its customers happy.'

Britain's biggest building society Nationwide also published its complaints yesterday, revealing that it received 90,200 between October 2009 to April 2010. It also turned down eight out of ten banking customers who complained.

A spokesman for Lloyds said: 'Like every organisation we know there are areas where we can improve and we're working with our customers to do just that.'


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