The Financial Conduct Authority says too many Brits are being tricked into signing up for costly, unnecessary current accounts.
In fact, personal and business bank account holders have been protesting long and hard about all manner of abuses at the hands of bankers. The City watchdog released figures showing that these squeaky wheels have been getting greased at a fair clip, as payouts made to irate banking customers for issues like current account and credit card charges have jumped by something like 27 per cent.
Now the FCA didn’t go into full details as to who was furious over what. Still, it says that the driving force behind the surge has been from banking customers being coaxed or convinced into taking up packaged accounts that carry additional monthly fees for unwanted and unnecessary add-ons like mobile phone insurance or travel cover. Many new account holders can’t even use the extras in some cases, such as in the case of travel insurance age limits and so forth. Sounds eerily familiar to the whole payment protection insurance (PPI) uproar a few years ago, doesn’t it?
Well, just like the results of all that PPI mis-selling, banks are doling out shedloads of cash to complainants, said the FCA. Nearly £270,000 was repaid to angry banking customers during the last six months of 2015 – a jump of 27 per cent from the first half of 2015. Meanwhile, current account complaints actually fell by 10 per cent during this time to just over 454,000.
Banks know they were doing wrong, too – or at least they might have suspected something like PPI mis-selling was going to come up again. The nation’s financial institutions have a collective compensation fund for such occasions in excess of £1 billion. You don’t exactly put aside that kind of dosh for a rainy day if you don’t have to.
Speaking of PPI mis-selling, complaints there have also jumped a bit over the period. A six per cent increase doesn’t sound like much, but the total volume of complaints – more than 930,000 – isn’t exactly a small problem. In fact, £1.6 billion of the nearly £2 billion in payouts for the period was specifically for PPI; a separate slush fund of £30 billion has been set aside to compensate PPI purchasers.
So who was the big loser in regards to the financial service provider with the worst complaint record? The crown goes to Barclays, which had nearly 280,000 complaints – a massive chunk of the more than 2.1 million total complaints lodged for the period. If you ask me, that’s not the kind of reputation I would want!