FSA raps knuckles of UK banks

28th Apr 2010 09:49

The Financial Services Authority (FSA) has found evidence of what it terms 'unacceptable standards' in the way some British banks handle complaints, and has instructed five unnamed UK banks to make changes to their customer complaints procedures as a result.Two of the five banks face possible fines as a result of underhand practices which are said to include incentives to staff for avoiding paying compensation even when the bank was at fault, and making complainants reiterate their complaints in the hope of wearing them down.The FSA's investigation found evidence of ""inadequate investigations, poor decision-making" and examples of "unsatisfactory correspondence with customers." Senior management at the banks were accused by the FSA of being uninterested in complaints handling. "While we found some good practice, there is clearly evidence of unacceptable standards of complaints handling in banks," said Dan Waters, the director of conduct risk at the FSA. "Delivering change in this area is a major priority and we are determined to use all the tools available to us to ensure that banks comply with our rules," Waters added.The FSA declined to divulge the identity of the five banks it has reprimanded but a spokesman for HSBC has gone on record to "categorically confirm that it is not one of the five banks being investigated by the FSA." Industry sources indicate that Spanish banking group Santander, which recently rebranded its Abbey, Alliance & Leicester and Bradford & Bingley branches under the parent company banner, was also not one of the five banks upbraided by the FSA.Meanwhile a study by the consumer group Which? found that Banks run by Lloyds, the 41% state-owned banking group are among those offering the worst customer service.Lloyds TSB, Halifax and Bank of Scotland, which are part of Lloyds Banking Group, and Northern Rock, which is fully-owned by the government, are the four banks at the bottom of list.