Santander reduces complaints by a third

One of the UK's most hated banks has made huge steps to reduce complaints against it.

In the first half of 2011, Santander received 75,000 fewer complaints than in the same period in 2010.

Banks operating in the UK are obliged to report any complaints or indications of dissatisfaction – written or verbal – to the Financial Services Authority, unless the complaint is resolved to the customer's satisfaction by the end of the following day. In the first six months of this year, Santander had 169,000 FSA-reportable complaints, but that is 31% fewer than previously.

The majority of complaints – 140,000 – were for banking services, with the rest being insurance, pensions and investments. Santander claims it settled 96% of all complaints within eight weeks and, of the closed complaints, it agreed with the customer's grievance 49% of the time. 

Santander offers some of the best products

Santander has been competing very hard for current account, savings account and credit card customers in particular. New current account customers get a fixed interest rate of 5% for 12 months and a £100 bonus when you make it your main account. In pure financial terms, that's by far the best current-account deal available.

If you have mortgage and savings products already with the bank, the cashback can be boosted to £300, as we showed in Make £300 by switching current accounts. However, most people will still be better off comparing and buying products separately.

Santander's easy-access savings account offers pretty much the highest rate available at 3.1% AER, although this is variable and has no guarantees, making ING's savings account a better buy. ING also pays 3.1% but the rate is guaranteed not to fall below 2.56% for 12 months. Leeds Building Society's account is also well worth considering for its guarantee, as I wrote in The 20 best savings accounts.

Just days ago, Santander also introduced a competitive cashback card, paying 1% for supermarket spend, 2% in department stores and 3% for petrol, although there is a £24 annual fee, and some department stores and petrol stations are classified as supermarkets. You can compare this with other top cashback cards in New cashback card shakes up the market. 

There's a sting in the tail

But the Spanish bank has had to contend with massive customer dissatisfaction on quality of service. Part of the cause could be attributed to teething problems when it integrated the two UK banks it bought: Abbey and Alliance & Leicester. Another part of the trouble has been its use of overseas call centres.

For these reasons and perhaps more, it has had some of the worst results on customer service for its size.

Yet it has worked hard to improve its image. It's moved its call centres back to the UK and is hiring more than 1,000 more customer service representatives, as well as opening a complaints line for seven days a week.

It also took a strategic decision to not get involved in the industry's legal action over payment protection insurance, and it was the only major bank not to get involved at any stage. This gives it another slight boost to its image.

It has received nearly 170,000 complaints in just half a year, so there is still a lot more the bank can do. Yet any improvements in service and complaints handling will make Santander's attractive products more compelling.  

If you're not happy with your bank

Santander customers made 7,300 complaints to the Financial Ombudsman Service in the first half of this year. This is surprisingly few, considering 170,000 complained directly to the bank.

If you feel your bank has wronged you, and you have either lost out financially or otherwise feel that it has caused you unfair stress, anxiety or inconvenience, you should first complain to your bank. If they do not satisfactorily settle your complaint, you may complaint to the Ombudsman, which is a free service that can force the bank to compensate you. Even if it doesn't, you have nothing to lose.

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