Banks let standards slip on complaints handling

Complaints handling in Britain's banks has been deteriorating over the past year, according to new data released by the Financial Ombudsman Service today.

The percentage of all financial complaints which were upheld in favour of the consumer increased to 57% in the first half of 2014, up from 51% in the last six months of 2013.

The higher uphold rate was driven by poorer performance in the banking sector, where uphold rates on PPI complaints once again increased - to 64%, up from 56% in the previous six months. Meanwhile, the percentage of other Banking & Credit related complaints upheld in favour of the consumer rose to 40%, up from 38% in the last six months of 2013, and 33% a year ago.

Commenting on the data, James Daley, founder and managing director of consumer group Fairer Finance, said: "The banks made some good progress at cleaning up their complaints handling procedures in the first few years after the financial crisis. But improvements seem to now be stalling, and in some cases are even going in reverse.

"If more than 50% of complaints to the Ombudsman are being upheld in favour of the customer, then quite simply banks are making the wrong decision when a customer first complains, more often than they're making the right one.

"Banks need to make every effort to sort out complaints at the very beginning of the process, and should be ready to give customers the benefit of the doubt more often - rather than forcing them to appeal to the Ombudsman, which can drag out disputes for months on end."