Banking News Banks Under Review Following Poor Complaints Handling 18470765

Banks under review following poor complaints handling
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Banks under review following poor complaints handling

28 April 2010 / by Lois Avery

Tough action is to be taken on banks with poor complaints handling records, according to The Financial Services Authority (FSA).

The FSA found weaknesses in five banks’ handling of customer complaints during a review of their services.

The review looked at the several banking groups responsible for over 70 per cent of the complaints firms receive and report to the FSA.

As a result five banks are being forced to make major changes to the way they deal with complaints and two of the five banks face further investigation.

Some of the issues uncovered by the review included poor standards of complaint handling within most of the banks assessed, including, a lack of senior management engagement and accountability for the delivery of fair complaint handling; poorly designed staff incentive schemes that made branch staff reluctant to pay redress to customers, even in situations where the bank was at fault; and the failure of banks to learn from previous complaints and to make changes to prevent similar complaints arising in the future.

It was not confirmed by the FSA which banks were investigated but Britain’s five biggest banking groups are Lloyds Banking Group, Royal Bank of Scotland, Santander, HSBC and Barclays.

Dan Waters, the FSA’s director of conduct risk, said: “A culture of fair complaint handling is an important indicator of whether a firm is committed to treating its customers fairly.  It is vital that customers know that if something goes wrong, their complaint will be dealt with in a reasonable way and that they will get a fair outcome.”

However, the FSA did find examples of good and compliant practices in parts of some of the banking groups assessed. 

“While we found some good practice, there is clearly evidence of unacceptable standards of complaints handling in banks.  Delivering change in this area is a major priority and we are determined to use all the tools available to us to ensure that banks comply with our rules,” added Mr Waters.

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Written by Editorial Team