James Daley

By James Daley

Lloyds Bank was in the news today, accused as being one of the banks that has underpaid its PPI compensation claims. If these allegations are true, I'm sure the regulator will come down on it with a ton of bricks, piling yet more cost and misery onto the seemingly neverending PPI saga.

But on complaints handling generally, Lloyds has been getting much better over the past few years. When the Financial Ombudsman Service first started publishing its complaints figures a few years ago, Lloyds was something of a basket case. The percentage of complaints being upheld in favour of the consumer was as high as 98% in some of its subsidiaries.

When the Financial Services Authority began publishing absolute numbers of complaints a few months later, Lloyds looked no better. Although the FSA (or FCA as it is now) figures are not much use at helping customers understand who is good and who is bad - relative to their size - it was clear that the sheer volume of complaints being received at Lloyds was vast.

Turning around the tanker

Over the past five years, Martin Dodd, the head of Lloyds' customer services division, has been on a mission to turn this position around. And he's made some impressive headway. In absolute terms, Lloyds's complaints have been falling rapidly. At last count, the number of complaints were down 35% year on year. And at the Ombudsman, uphold rates have improved as well. Fairer Finance's analysis uses Ombudsman data, and of the 18 companies we rate in the bank account sector, Lloyds is now fourth on complaints, only just behind Nationwide, First Direct and HSBC.

There's still plenty of work to do, and Lloyds seems not to be complacent. Unlike some of its competitors, it seems to better understand that you have to earn a reputation for fairness, rather than running an advertising campaign simply telling everyone that you're fair. Lloyds remains an enormous banking business - even once TSB has been permanently hived off - and there remains plenty of areas where its new ethics do not seem to be shining through. Today's story about PPI payouts may be one. Its record on transparency is also incredibly variable - changing from brand to brand, product to product.

For example, while Halifax has clearly made some important steps in trying to create some current account literature that is easy to read and nicely laid out (even if there is large chunk of legalese tacked onto the last pages), its sister brand Lloyds has one of the track scores for transparency in banking.

Turning the old Lloyds into a group that looks fair in all corners of its business is a big job. It's important to acknowledge that good progress is being made. But there's also a long way to go.