Business

Lloyds banking group sees complaints rise

Lloyds TSB sign
Image caption More customers are complaining and more are being successful

Lloyds Banking Group, the UK's largest bank, has said its customer complaints rose by 14% in the second half of 2010.

Lloyds, which runs the Halifax and Bank of Scotland, received 330,000 complaints in the last six months of last year.

The bank said the increase was due to the continued upsurge in complaints about the sale of payment protection insurance policies.

Complaints just about banking services fell by 12% to 155,000.

"We know we still have a lot to do," said Martin Dodd, the group's director of customer services.

'Initiatives'

He explained that the statistics, which will be published by the Financial Services Authority (FSA) alongside those for other banking groups at the end of March, were starting to reflect a thorough overhaul of complaints procedures at Lloyds.

He said that since last autumn, 40,000 branch and call-centre staff had been retrained to deal with complaints.

If they cannot resolve the problem then the staff, or the customer, can be put through to an internal advice team of more experienced staff whose job is to see the complaint through to the end.

Mr Dodd said these changes meant the bank was now resolving 90% of all new complaints being made against it.

"What we saw was a direct correlation between these initiatives and the fall in [banking] complaints," he said.

Success rate

While the volume of banking complaints dropped at Lloyds Banking Group, those for general insurance and "pure protection" shot up by 64% to 156,000 in the second half of last year.

The banking industry has come under severe criticism from regulators as well as consumer groups for the way it deals with disgruntled customers.

At Lloyds, the increased attention paid to customers' gripes appears to have increased their likelihood of being upheld by the bank' s staff, rather than being taken to the Financial Ombudsman Service (FOS).

At Lloyds TSB bank, the percentage of upheld complaints rose from 12% in the first half of last year to 40%. The success rate for insurance complaints also rose, from 54% to 68%.

At Bank of Scotland the percentage of banking complaints upheld shot up from 7% to 39%, while those for insurance rose from 69% to 72%.

At the Black Horse subsidiary, which mainly sells insurance, successful complaints about insurance policies rose from 53% to 83%.

In January, RBS and its subsidiary Natwest were fined £2.8 million by the Financial Services Authority (FSA) for not dealing fairly with their customers' complaints.

The FSA said that bank's failings had involved delays, shoddy investigations and inadequate explanations.

RBS and all other financial services companies have until next Monday to publish their latest half-yearly complaints figures on their own FSA.

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