Banks lambasted by regulator for complaints handling

A probe by the financial services regulator into the UK’s largest banks has revealed widespread failings in the way they handle customer complaints.

The Financial Services Authority (FSA) started investigating the five unnamed banks last May, but said that they if they did not undertake agreed improvements in their "unacceptably" poor complaint handling procedures by the end of the year, they would face fines.

Two are being investigated further, however, and may end up with multi-million pound fines anyway.

The FSA said that the five were responsible for more than 70% of all complaints in this area and while it would not confirm which were involved, the largest are Lloyds Banking Group, Royal Bank of Scotland, Santander, HSBC and Barclays.

The regulator blamed low standards on senior managers being insufficiently interested in complaints procedures and on the poor training of frontline staff, who were often not given enough time to deal with gripes effectively.

Dan Waters, the FSA’s director of conduct risk, said: "While we found some good practice, there is clearly evidence of unacceptable standards of complaints handling in banks. Delivering change in this area is a major priority and we are determined to use all the tools available to us to ensure that banks comply with our rules."

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