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Lloyds TSB shamed over complaints handling

Black day for Black Horse

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It’s free to complain to the Financial Ombudsman Service if you’ve reached deadlock with your bank

Lloyds TSB has been highlighted as one of the worst companies at dealing with its customers’ complaints, as new data reveals that the Financial Ombudsman Service upheld more than 90% of cases against the bank’s insurance subsidiaries during the first six months of the year.

Some 99% of general insurance cases against Black Horse Limited and 92% of cases against Lloyds TSB Insurance Services were upheld by the FOS – and it is believed that most of these relate to Payment Protection Insurance (PPI) policies. Another company, Loans.co.uk, which was fined for PPI mis-selling by the Financial Services Authority three years ago, attracted the second highest proportion of upheld complaints, with 93% of cases being ruled in favour of the customer. 

Capital One and Egg were two other providers that saw almost all general insurance complaints against them upheld by the FOS. Some 98% of general insurance cases against Capital One, and 99% of insurance cases against Egg, were upheld. While the firms also saw 87% and 78% respectively of banking and credit cases go against them.

Commenting on the FOS data, Lloyds TSB said: ‘The vast majority of our customers are satisfied with the service we provide. This is reflected in the low number of complaints we receive in relation to the high number of customer accounts we hold. Any interpretation of complaints statistics should take into account the size of the relevant customer base and with over 30 million customers, the group has the largest customer base in the UK.

‘We recognise that sometimes things go wrong and, when this happens, we are committed to listening to our customers and putting things right as quickly as possible. We take all customer complaints very seriously and encourage customers to contact us directly should they have a concern about one of our products or the service we provide.’

Complaints should never have reached the FOS

Consumers can appeal to the FOS once they have had their complaints rejected by a financial provider. The high uphold rate at the FOS means that banks and insurers have been rejecting a large number of valid complaints. Which? chief executive Peter Vicary Smith said : ‘Over half of the complaints to FOS are upheld in favour of the consumer; they should have been dealt with by providers’ internal procedures before reaching that point.’

Dan Moore, senior researcher at Which? added: ‘While most complaints never reach the Ombudsman, the proportion that do and are resolved in favour of the consumer points to serious failings in the financial sector. Greater awareness of the right to go to the FOS will probably lead to even more complaints, but if this encourages companies to act more responsibly then that can only be a good thing.’

For more on the Financial Ombudsman Service complaints data and what this means for consumers, see FOS naming-and-shaming victory for consumers. Also, see the Which? campaigns site for more information on financial issues that affect consumers.

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