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25 August 2015

Reuters: UK banking complaints grow 8 percent on packaged account concerns

Complaints about Britain's financial firms rose eight percent in the first half of this year after a jump in new cases about packaged bank accounts, the industry's watchdog said.

Packaged bank accounts offer a range of additional services - such as insurance policies, better deals on savings accounts or loans, and other perks in exchange for a monthly fee.

Three major banks - Royal Bank of Scotland, Barclays and Lloyds - have set aside 732 million pounds ($1.16 billion) between them to compensate customers for possible mis-sold packaged accounts, raising concern it could build into another big compensation problem for the industry.

New complaints about payment protection insurance (PPI) products in the six months to the end of June totalled 94,091, down 10% from the previous six months but still accounting for 55% of all cases, the Financial Ombudsman Service said.

There was a 45% jump in the number of complaints about financial products other than PPI, mainly due to more complaints about packaged bank account brought by claims management companies, the ombudsman said.

Banks have set aside more than 28 billion pounds in compensation for PPI mis-selling, including 13.4 billion by Lloyds Banking Group alone, making it by far the costliest scandal to hit the industry. The number of claims is slowing, but not as fast as banks had expected.

Full article

© Reuters

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