The banks you complained about more this year

We look at which banks have the fewest complaints per customer, which banks are getting fewer complaints this year compared to last year and which have the best products.

Current accounts offer great benefits to new customers that should help offset the poor savings rates we're getting right now. The problem is that moving bank account is not something most people want to face doing every year. If you move, you'll probably stick with your new account for a while, so you'll want to ensure the service isn't amongst the worst in banking.

And there's some pretty bad service

We can get a rough feel for how dissatisfied customers are by looking at the numbers complaining to the Financial Ombudsman Service about current accounts and related products (but excluding insurance, pensions, mortgages and so on), which started publishing complaints data in 2009. By comparing the number of new complaints in the first six months of 2009 with new complaints in the first six months of 2010, we can also perhaps see if any banks bothered to make improvements.

Here are the number of complaints that got to the Financial Ombudsman for the major banks (and the building society Nationwide) for banking products:

Banking complaints in H1 2009 compared to H1 2010

*Includes Lloyds TSB, HBOS, Black Horse, and Cheltenham & Gloucester.

**Includes Santander, Abbey National and Alliance & Leicester.

***Includes Royal Bank of Scotland, NatWest and Ulster Bank.

****Includes First Direct

*****Includes Clydesdale Bank and Yorkshire Bank.

Remember, just a small proportion of dissatisfied customers take their complaint all the way to the Financial Ombudsman Service. Overall there are many more, but this still gives you an idea which banks have the least satisfied customers.

It may be that more people are experiencing financial hardship now due to the ongoing economy trouble, which seems like a reasonable excuse for Lloyds', Santander's and HSBC's figures rising dramatically in 2010. However, Barclays, Royal Bank of Scotland and Nationwide have seen no dramatic changes, with two of them even having modest falls, which perhaps shows that some banks have taken the naming and shaming of this new FOS data seriously whilst others haven't.

All things aren't equal

Yet it's not surprising that Lloyds Banking Group, which includes Halifax and Bank of Scotland, amongst others, has the most complaints, as it's also got the most banking customers at around 30 million. That's why we need to take customer numbers into account as well. When I do this, Lloyds still looks pretty awful.

HSBC may have seen a big increase, but it has less than a quarter of the complaints of Lloyds and perhaps half as many customers, as best as I can ascertain. Hence, it gets just half as many complaints as Lloyds on a rough per customer basis.

According to an article in a broadsheet newspaper, Lloyds doesn't think its record is all that bad. It said that it has received complaints from less than 1% of its customers in the first half the year. But it’s not much less than 1%. And, in my view, to say that almost 1% has complained in a period of just six months is a good thing is to put quite a spin on it, especially as customer-bank relationships traditionally last decades.

From the best customer figures I can get, it seems that Barclays and Royal Bank of Scotland also probably get proportionately less complaints per customer than Lloyds Banking Group, but more than HSBC, and is pretty much in the middle.

Amazingly, despite the big press about nasty Santander service, its performance on a per customer basis seems to make it better than Barclays, if not as good as HSBC. However, I guess that's because many of the complaints about Santander have been technical problems and simply delays  in dealing with problems seemingly caused by disorganisation in this still-new entrant to the UK. I would guess that those sorts of complaints are less likely to make it to the Ombudsman than a complaint about unfair treatment.

Nationwide has just 20% of the complaints of Lloyds when adjusted for the number of customers, making it way better than the rest I've mentioned so far. Not only that, but its customer numbers have been growing through the crisis, so it has maintained the same number of complaints with more customers.

Here are the banks' rankings with the complaints figures adjusted by customer numbers:

Real rankings based on least complaints

Choosing from this lot

Looking now at the current account products currently available, HSBC, which was top of the major banks, has one of the best deals at the moment through its First Direct subsidiary by offering a flat £100 for joining, which destroys most other banks, as they're typically offering a poor interest rate instead.

If you want to give Santander a chance that its record has just been teething problems, it offers the same £100 plus 5% AER fixed interest on the first £2,500 that's in your account at any one time for 12 months.

I like Halifax's offer of  a flat £5 per month, every month with no end date (although banks have a nasty habit of pulling benefits when enough customers have been attracted). However, as it's part of the Lloyds Banking Group you may want to think twice.

Unfortunately, Nationwide doesn't offer any great introductory interest rates or cash bribes. However, it does offer free travel insurance.

To get any of the benefits from these accounts you usually have to pay in between £750 and £1,500 per month, but the terms and conditions of each account are clearly stated on this page.

Finally, to see how dissatisfied borrowers are with their mortgage lenders, check out John Fitzsimons article The worst mortgage lenders in the country!

Compare current accounts through lovemoney.com.