Financial Complaints: Record number of consumers take revenge on banks

Picture: Contributed
Picture: Contributed
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A RECORD number of Scots filed complaints about financial services companies last year as banks turned their backs on ripped-off customers and struggling households.

Complaints to the Financial Ombudsman Service (Fos) from people in Scotland reached a record high in 2012, new figures show. Glaswegians were more likely than residents of any other city in the UK to make complaints to the Fos last year, according to research the service has produced for The Scotsman.

The ombudsman reported a “massive increase” in complaints from people all over Scotland regarding a vast array of problems with finance firms.

More than 180,000 Scots contacted the service in 2012, up from 100,000 the previous year.

The Fos revealed that Scotland accounted for almost one in ten complaints it received last year, with an 80 per cent jump in cases from Glasgow and Edinburgh and the number of complaints from Inverness and Dundee almost double the 2011 level.

The ongoing clamour for payment protection insurance (PPI) mis-selling remains the biggest single issue, but there’s also evidence of more disputes between firms and consumers regarding product costs.

The figures also paint a picture of an industry in which attitudes towards financially struggling customers are increasingly 

A growing number of complaints concern the perceived failure of banks and building societies to help those in financial hardship.

Here’s more on the complaints that disgruntled Scots are raising with banks and other financial services firms.


Payment protection insurance (PPI) was responsible for the greatest number of grievances. The ombudsman received 28,393 new complaints about PPI from people north of the Border, more than double the previous year.

Banks have set aside some £15 billion to compensate PPI mis-selling victims and the figure is still climbing. The Fos is handling an ever-rising caseload of PPI issues, largely because banks are rejecting around a third of PPI claims.

But with the Fos continuing to uphold the vast majority of PPI cases in favour of the consumer, it seems the high street banks are still fudging legitimate complaints in the hope that the customer won’t take their complaint any further.


Consumers appear to be reaching the end of their collective tether when it comes to current accounts, judging by the 29 per cent spike in the number of complaints from people in Scotland last year.

The main problems in this area are typically around disputed transactions – which the Fos tends to uphold if the bank hasn’t carried out a full investigation – as well as bank errors in setting up, switching or closing accounts.

Complaints about current accounts have also been driven up by an apparent hardening of attitudes towards customers struggling with debt.

Three in four bank-related complaints to StepChange Debt Charity Scotland in the first quarter of 2013 concerned current accounts, up from just over half last year.

Most of those came after banks had refused to cancel debit card payments for payday lenders, said Sharon Bell, head of StepChange Debt Charity Scotland. “Since 2009, customers have had a right to stop debit card payments, including those to payday loans, by informing their bank.

“However, our clients have reported cases of every high street [bank] either refusing to do this or misinforming their customers about their legal rights. This issue is currently the fourth biggest source of complaints for our clients.”

There’s also a growing backlash against the sale of paid-for packaged accounts. Complaints about these accounts – for which more than ten million people pay an average of £15 a month – have doubled over the past six months. The issues raised tend to be about the benefits sold with the products – such as travel insurance or mobile phone insurance – that aren’t suitable for customers’ needs. While complaints about the way in which the accounts are sold are low, they are on the rise and could be set to increase dramatically over the coming months.

That’s because of new rules that came into force in March forcing banks to write to packaged account customers outlining exactly what they’re paying for and reminding them to check the benefits are suitable for them. With an estimated one in three packaged account users not taking advantage of the value-added benefits in their account, these letters are expected to trigger a wave of mis-selling complaints.


Disputes between banks and consumers over borrowing tend to climb when times are hard and the past couple of years have been no exception. While more people are being hit with charges for going overdrawn or missing loan repayments, banks are less inclined to back down in disagreements that would involve them writing off debts.

“Unsurprisingly, given the current economic climate, we see cases where consumers are facing financial hardship and are unable to make the monthly repayments. In these instances they may complain that the business has not done enough to assist them,” said the Fos.

Other instances where customers took action against card providers include transactions that the former believes were fraudulent and should be written off by their bank.

Banks are also rejecting valid claims for refunds on large card purchases, even where they have a legal obligation to pay out. Under section 75 of the Consumer Credit Act, credit card providers are jointly liable with the retailer or supplier where there has been a problem with a card payment of more than £100 but less than £30,000.

Claims usually follow allegedly fraudulent payments, breach of contract or where the firm supplying the goods or services has gone out of business.

“We continue to see issues about section 75 as more consumers are paying for goods or services using credit and as more suppliers are going out of business,” said the Fos.

“We’re also continuing to see complaints where the consumer is disputing charges that have been applied to their account.”

Making a complaint

1 Get in touch with the firm involved

The first step is to contact the company with which you have a grievance. Contact it by phone, letter or e-mail and keep hold of any documentation that you send or receive. Such details – and the names of the people you deal with in the process – may bolster your claim at a later stage.

2 Be patient

The company must respond to your complaint within eight weeks. If you don’t hear anything, remind them that they have a legal obligation to respond. If you still don’t get a reply or if you’re unhappy with the response you get, you should then take your case to the Financial Ombudsman Service.

3 Don’t be deterred

Many people give up when they’ve been fobbed off with an unsatisfactory response by the company they complained to; banks in particular let complaint deadlines expire without issuing a response, presuming (correctly) that relatively few people will take their case further. However it’s both easy and free to make a complaint with the Fos, which mediates in disputes between financial services providers and consumers. It can be contacted on 0845 080 1800 or by e-mail Do this within six months of the eight-week deadline expiring.

4 You don’t need a middleman

Don’t use a claims management company to deal with your complaint. You’re no more likely to enjoy success with your claim if you get one of these firms to do it for you, and they’ll take a cut of up to 30 per cent of any compensation that you do win.

5 Push your case

The more details you can pass to the Fos, the better your chances of a positive hearing. Send any paperwork supporting both your original complaint – including account and/or policy numbers – and, if relevant, any evidence of your complaint being badly handled by the firm in question. Cases would usually take around three months to resolve, but the sheer volume of PPI complaints going through the Fos at present means you might have to wait for longer.

6 Give it one last try

You have a right to appeal if your complaint isn’t upheld by the Fos. Another option, albeit at a small cost, is the small claims procedure in the sheriff court. See for more information.