Financial firms are not providing the level of customer service necessary to succeed or keep customers in the tough economy. Phil Jones, campaigner on personal finance for Which? indicated that the finance industry needs to go through dramatic changes for the future.
Jones said that the number of unhappy customers is a “poor reflection” on the financial industry, that financial firms are not treating customers the way they should and that the industry needs to make some dramatic changes if it wants to salvage its reputation.
Jones indicated that there is a veil protecting offending companies, making it more difficult for consumers to choose banks, lending partners and credit card companies wisely.
He said that consumers need access to more information about firms, especially complaints, so they can make informed choices about banks, lending partners and credit card companies.
The FSA’s current plan for identifying financial firms that are failing customers calls for groups to be identified but not individual firm names and is not helpful to consumers. For consumers, the name Lloyds Banking Group, will mean nothing, whereas Halifax may be the common firm name in their area.
Which? wants all complaints on individual financial firms, including whether complaints were remedied or not, to be made publicly available to consumers. The campaigners are seeking full details of complaints about individual products offered by each financial institution or firm.
In addition, Which? wants information in the publication to be consistent with the Financial Ombudsman Service, to provide the percentage of complaints versus the percentage of remedies, and to reflect the size of the business.
Compared to the first six months of 2006, the last six months of 2008 saw a 32% rise in the number of complaints against banks, going from 760,000 to 1,003,000. Complaints to credit card companies rose nearly 50%, from 73,500 to 151,000 and complaints concerning current accounts rose by 46%, from 368,000 to 536,000.
The most common complaints are those related to customer service. Complaints about poor customer service increased by 28% in 2008, rising from 187,000 to 239,500. The number of complaints remedied by banks fell from 49% to a mere 38%.
In addition, Cash ISAs, General Insurance and Pure protection products all saw increases in complaints of 20% or higher. The most significant increase in complaints between 2006 and 2008 was due to unfair and unauthorised overdraft charges being made on accounts.