Overdraft fees backlog sees near doubling of complaints over banks

THE number of consumer complaints made to banks and building societies more than doubled in the second half of 2009, the City watchdog said yesterday.

There were 2,014,371 complaints about bank and building society products over the period, compared with 867,427 in the first six months of the year, according to the Financial Services Authority (FSA).

The increase was due primarily to two years' worth of back-dated complaints about unauthorised overdraft charges that had been on hold during a High Court test case between the Office of Fair Trading and the major banks regarding the legality of the charges.

The waiver, imposed in 2007, was lifted after the case ended in November with a decision in favour the banks.

The FSA, which is headed by chief executive Hector Sants, said: "Banks now have to deal with these complaints, which accounts for most of the increase in complaints related to banking during this period."

Complaints about financial services firms reached 2.6 million in total, a million up on the first half of the year and the biggest since the first half of 2007, when complaints about overdraft charges reached a peak before the waiver was implemented.

There were 421,368 complaints about general insurance and pure protection – 174,000 over payment protection insurance mis-selling. General insurance and pure protection complaints accounted for almost half the total 284m redress paid by financial services firms in the second half of 2009.