The most hated banks in Britain

Which banks receive the most complaints about their products and services? Harvey Jones names and shames the worst offenders.

Everybody loathes the big banks, and now we've been handed a fresh box of ammunition to blast them with.

The Financial Ombudsman Service has just published its first-ever report naming and shaming the individual banks, insurance companies and investment firms that attract the most complaints from the likes of you and I.

I've been waiting for this moment for over a year, after the Ombudsman released its proposals for publishing data on the full-blown complaints it handles about financial services companies.

This week it published complaints data for the first six months of this year, covering the 142 largest firms of the 10,000 it covers. And you won't be surprised to discover some familiar names topping the table.

The big five

The bad banks league table looks rather like the Premiership, with all the usual big names clustered at the top.

Abbey, Barclays, Lloyds, HSBC and RBS were responsible for more than half of the 69,841 complaints lodged in the first half of this year.

Barclays nabbed top spot by attracting 8,283 complaints, 12% of the total, followed by Lloyds TSB with 5,804. Although Lloyds Banking Group, including Bank of Scotland, was the worst offender, with 15,233 complaints.

And these aren't frivolous complaints either. The Ombudsman upheld 61% of banking complaints, 41% of mortgage complaints, 70% of general insurance complaints and 42% of investment complaints.

The figures are freely available, you can find them here, and are worth checking before you sign up to any financial services product. They are likely to become more useful over time, as trends emerge, and we can see which banks are mending their ways, and which are not.

We eat bad news

The Ombudsman isn't publishing these complaints just to confirm the likes of you and I in our prejudices, however satisfying that may be, but hopes it will persuade banks to improve their complaints handling and slash the number of unresolved disputes. In other words, tidy up a messy act.

It previously tried a softer approach, publishing anonymised data on the top 11 financial services companies, but that didn't work. The very best and very worst companies hadn't shifted position in years, again, rather like the Premiership (where at least the worst performers get relegated).

Let's hope naming and shaming works. Although history suggests that banks have developed group resistance to bad publicity, in fact, I'm beginning to suspect they feed off it.

Payment protection insurrection

If you know anything about payment protection insurance (PPI), you won't be surprised to discover this drew the most insurance complaints, with the highest proportion of cases settled in the consumer's favour.

Complainants won 98% of PPI cases against Lloyds and Northern Rock, 93% against Barclays, 89% against NatWest and 79% against HBOS and HSBC. For complaints against credit card and loan companies such as MBNA Europe, Egg, Capital One and HFC, the hit rate was between 96% and 99%.

Remember, all these people had initially complained to the company itself, and got the brush off. So if any company rejects your complaint, don't give up! Take your woes to the Ombudsman - there is a strong chance you are in the right. In some cases, a 99% chance.

It's not fair!

On a personal note, I was delighted to see Lloyds TSB riding high in the table, because it has long has been my banking bugbear (I'm sure you have your own - please share it with us using the comments box below). Every time I need an example of dodgy credit card small print or a hopeless savings rate, I know where to go.

Take, for example, its Advance MasterCard, which is one of the few cards to scrap the traditional 56 days' interest-free period on purchases. This means you start paying interest the moment you key in your PIN (after the 0% six month introductory rate on purchases). It's a card, but it isn't a credit card.

But I can also see that this new data isn't totally fair on the banks. Of course Lloyds, as well as Abbey, Barclays, HSBC and RBS top the complaints table, because they have by far the most customers.

Lloyds Banking Group attracts 15,233 complaints and CompuCredit UK gets 41 complaints, what does that tell us? Primarily that Lloyds is vastly bigger.

Funnily enough, the banks aren't happy either, recognising that every six months, the same names will get a pasting, and there is only so much they can do about it.

Let's hope the data gets a bit more sophisticated in future.

Not happy at all

The British Bankers' Association has fought back by pointing out that banks process millions of transactions every day, and only a tiny proportion spark any kind of grievance.

Fair point, but this line of defence falsely assumes that anybody who doesn't file a complaint is happy with their bank, which clearly isn't the case. So if you aren't satisfied, don't let your bank wrongly count you as a happy chappy, make sure they know about it.

If you want to add to Lloyds' woes, or feel another bank merits a higher ranking in the bad bank league table, Jane Baker tells you how to complain when things go wrong.

This new data is a victory for consumers, don't squander it.

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