Britain's worst banks

New figures from the Financial Ombudsman show which banks and financial firms treat us the worst.

Last week, the Financial Ombudsman Service (FOS) produced its six-monthly naming and shaming report, showing the number of complaints it has received against individual businesses, as well as the percentage of complaints it upheld in favour of the consumer.

It always makes interesting reading and there are usually one or two surprises.

Ever wondered which household names top the table for the most complaints received about them? Which businesses had 100% of complaints against them upheld in favour of the consumer? And which banks crop up again and again in the complaints lists for different product areas? It’s all there in black and white from the FOS.

It’s important to remember that the figures do not represent the total number of complaints made against firms, as most of the time complaints are sorted out ‘in-house’ by the financial company themselves, and the issue never escalates as far as the Ombudsman.

The FOS figures relate to complaints that didn’t get resolved by the provider to the satisfaction of the customer, who then chose to complain to the Ombudsman. So it could be argued that they also say something about certain companies’ complaint-handling procedures.

The overall number of complaints to the FOS rose by a significant 18% in the second six months of 2009 to 82,136, with 53% of cases being ruled in favour of the consumer. Just think of the time and money that would have been saved if those 43,532 had been sorted out properly in the first place!

So which financial companies came top?

Across all areas

There are no surprises on the overall group figures as the bigger banks attracted the most complaints. This is entirely expected given the number of customers they have but, for the record, Lloyds Banking Group topped the complaints list with over 20,000 made against it in the second half of 2009, Barclays came second with over 10,000 and taxpayer-owned Royal Bank of Scotland followed with more than 7,000.

OK, so the more customers the more chance of a high level of complaints, but what about those firms that saw the highest percentage of complaints against them ruled in favour of the consumer?

It may or may not surprise you to hear that Ocean Finance and Mortgages, of daytime TV adverts fame, was ruled against in 100% of cases, as was insurance firm Eisis Ltd.

Wills & Co Stockbrokers had 98% of complaints against it ruled in favour of the consumer, and loan company Welcome Financial Services 92%.

But what about the big financial groups?

The most-recognisable names to have a high level of complaints ruled in favour of the consumer are Barclays’ Firstplus Financial Group with 87%, Citi Financial Europe with 86%, credit card provider MBNA with 85% and Egg Banking with 82%.

When you start to drill down into product areas you’ll see more household names appear, but the overall figures tend to be dominated by businesses that operate in product areas that draw a lot of complaints – such as loans and insurance.

However, banking and credit providers get their fair share too.

Banking and credit

In terms of sheer number of complaints there are no real surprises in the top 10:

1. Barclays Bank – 5,908
2. Bank of Scotland – 4,993
3. Lloyds TSB – 4,693
4. Santander - 2,023
5. NatWest - 1,864
6. HSBC - 1,823
7. Alliance & Leicester – 1,232
8. Capital One Bank – 1,165
9. MBNA Europe Bank - 1,098
10. Nationwide Building Society - 839

The worst three brands in the banking and credit sector, in terms of the percentage of cases ruled against them, are all part of the Shop Direct Group. And the roll call is as follows:

1. Shop Direct Home Shopping Limited - 91%
2. Shop Direct Financial Services - 88%
3. Shop Direct Finance Company - 86%

But let’s face it, we want to know how some of the big boys did. Notable names to have a high percentage of cases ruled against them include:

• ING Direct – 80%
• HFC Bank - 55%
• Barclays Bank - 54%
• Alliance & Leicester - 54%
• Northern Rock Asset Management (known as the bad bank) - 53%
• HSBC - 53%
• Santander - 48%

Mortgages and home finance

Mortgage lenders have faced an onslaught of public criticism over the last couple of years so you would expect a swathe of complaints but, in fact, it’s a sector that receives fewer complaints that most.

Again, few surprises in the businesses getting the most complaints, although note the appearance of Barclays again – you’ll see it mentioned a few times throughout the article, along with Bank of Scotland – two massive firms that seem to attract a lot of complaints across sectors!

The firms with the highest number of mortgage and home finance complaints are:

 1.  Bank of Scotland - 561

 2.  Barclays Bank- 486

 3.  Santander - 284

 4.  Cheltenham & Gloucester - 179

 5.  Northern Rock Asset Management - 142

Those mortgage lenders to have had the highest percentage of complaints against them ruled in favour of the consumer include a sprinkling of specialist lenders, but also some mainstream players:

1. GE Money Home Lending - 67%
2. Barclays Bank - 56%
3. Clydesdale Bank - 53%
4. Kensington Mortgages – 52%
5. NatWest – 45%

General insurance

The general insurance market covers a huge number of products, which goes some way to explaining why those with the most complaints are household names, while those with highest proportion of complaints ruled against them are more niche operators, dealing in some of the more ‘controversial’ insurance areas. I’ve listed the top five of each below:

Highest number of complaints

1. Lloyds TSB - 4,853
2. Barclays Bank - 2,582
3. Lloyds TSB – 1,695
4. Black Horse – 1,300
5. The Royal Bank of Scotland – 1,100

Highest percentage of complaints upheld

1. Ocean Finance and Mortgages - 100%
2. Eisis Ltd - 100%
3. MBNA Europe Bank - 99%
4. Firstplus Financial Group - 99%
5. Central Trust - 99%

Investments providers

In the investment sector alone Barclays Bank crops up again as the business that had most complaints made against it (700), followed by Bank of Scotland (again) with 499 and Lloyds TSB (not for the first time) with 236.

Wills & Co stockbrokers was the firm to have the highest level of complaints against it upheld by the FOS (98%) but Clydesdale Bank and Alliance & Leicester were both ruled against in 70% of complaints made against them – a shocking figure for such big brands.

The complaints figures are wide-ranging and, despite mentioning many here, the FOS data includes a lot more information. You can read it yourself and search for complaints information on specific businesses.

Tell us what you think

Let us know if any of the Ombudsman’s findings ring true in your experience or if you have experienced outstanding service or complaints-handling from any of the businesses mentioned.

And remember, if you’ve ever got a banking dilemma, you can head over to Q&A to get free advice from other lovemoney.com readers.