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UK banks 'facing fewer complaints'

24/10/13

The number of complaints aimed at UK banks is falling, although the mis-selling of payment protection insurance (PPI) remains the biggest issue for consumers, according to new data from the Financial Conduct Authority (FCA).

Customers made a total of 2.9 million complaints to financial services firms in the first six months of 2013, 15 per cent fewer than the amount made in the second half of last year.

Although the number of recorded concerns about PPI dropped 18 per cent, they remain high at 1.8 million in total. Furthermore, complaints about other kinds of insurance products jumped six per cent, suggesting more issues could emerge in the coming years following the resolution of the PPI scandal.

On the bright side, a significant drop in complaints about credit cards saw the number of problems fall by 42 per cent to 164,134.

Banks have revamped their governance procedures in the wake of several reputation-damaging failures over the last few years, with the intention of regaining the trust of understandably wary consumers.

This is reflected in the increasingly efficient way in which they are handling complaints, a shift that is likely to please consumers keen to have their claims settled as soon as possible.

Complaints are also being dealt with faster than ever, with 92 per cent of them resolved within the targeted eight weeks - the highest percentage since FCA complaints data was first published in 2006.

Barclays Banks was the most complained-about institution, closely followed by Lloyd's Banks and MBNA Limited.

Financial companies have already paid out billions in compensation to customers affected by the miss-selling of PPI, while suffering from reputational damage as a result of the furore over the issue.

Mis-sold interest rate hedging products are expected to be yet another costly burden to financial institutions, with many banks already hiring staff to deal with the influx of complains around this problem.

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