Wednesday, 28 April 2010

FSA takes UK banks to task over complaints handling

The Financial Services Authority (FSA) is taking tough action after finding weaknesses in five banks handling of customer complaints. It is understood the worst UK banks as regards complaint handling include Lloyds TSB (Bank of Scotland), Barclays, Royal Bank of Scotland, and Santander (the former Abbey National).

As a result of the review, five banks are undertaking major changes to the way they deal with complaints and two of the five banks have been referred to enforcement for further investigation. The review looked at several banking groups responsible for over 70% of the complaints firms receive and report to the FSA and over 60% of those resolved by the Financial Ombudsman Service (FOS).

It found 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;
* Poor quality complaint handling by staff in branches and general call-centres leading to inadequate investigations, poor decision making as to the outcome of the complaint and unsatisfactory correspondence with customers;
* Complaint handling procedures that led to staff issuing multiple, repetitive responses to customers, forcing them to restate their complaint a number of times in the face of ongoing negative responses from the bank;
* The failure of banks to learn from previous complaints and to make changes to prevent similar complaints arising in the future.

Further information is available on the FSA's site here.
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1 comment:

  1. Financial Services Authority says bank trading needs tougher rules, from beefing up the current framework to fundamental change. This would end the distinction between trading and bank books. According to FSA compliance all the rules laid should be strictly followed by banks.

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