Big jump in banking complaints

Complaints about high street banks rose by almost 50% in 2005, according to figures published by the Banking Code Standards Board.

The board, which operates a voluntary code of conduct for banks, received 3,500 complaints in 2005.

There were 1,200 complaints between August 2005 and January, and the greatest number related to interest rates and penalty charges imposed by banks.

The figures come after the Office of Fair Trading recently announced that banks were levelling unlawful penalty charges of more than £300m a year, and in a year when the big banks announced combined profits of more than £33bn.

The security and reliability of banking and payment systems were the second-biggest concern for customers, and there were also a number of complaints from people who had difficulty opening a basic bank account.

Complaint handling itself was also high on the list of problems. More than one in 10 disputes related to the way complaints were handled by bank staff.

The board said there had been a number of cases where banks had failed to meet the time scales set out in the Banking Code, and that its members would be reported to the Financial Services Authority if they continued to fail to comply with the rules.

The board said that it was often a last resort for complaining customers and that it was concerned that the number of complaints could be the tip of the iceberg.

A spokesman for the Financial Ombudsman, an independent body that mediates disputes between customers and the financial services industry, said it also expected the number of complaints about banks to increase.

He said the Ombudsman had dealt with between 15,000 and 20,000 complaints related to banking over the past financial year, out of the 120,000 complaints it had received.

The majority - about 70,000 - related to endowment mortgages. Audited figures are expected next month.