Why we need more visibility on complaints against firms

Is your credit card provider, bank or building society good at looking after its customers?

We often don’t know, until it is too late, and we ourselves have been on the wrong end of some poor care.

Reputations for poor service, when endemic, develop rapidly, and yet still people rarely change provider until they have suffered it themselves.

In April, the Financial Conduct Authority published its half-yearly complaints data for the end of 2016. 

A change to policy means that these figures now include all complaints handled by regulated firms.

To enable fairer comparison between businesses, complaint volumes have also been set in the context of the size of the business.

However, the FCA only requires firms who have received 500 or more complaints per half year to publish their data. Smaller firms, such as many of the fintech start-ups you might read about on Good With Money, are therefore left off the list.

The product categorisation is also a bit difficult to unravel. Grouping banking and credit cards, or insurance and protection, together, make it hard to see which products are driving the most complaints within a firm.

And finally, pure consumer credit firms are not included in the new data.

There are also inconsistencies and risks. Firms can choose how they define a complaint. Because the definition varies, the eventual number of complaints may not be exactly comparable. There’s also a risk that reporting all complaints could actually increase poor behaviour in some firms, as staff may choose to use a narrower definition of a complaint to avoid reporting it, in an effort to keep the numbers down.

telling customers that RBS and HSBC get a lot of complaints is hardly going to shock us into closing our accounts. Tell us something we don’t know.

Nevertheless, the new figures revealed the following:

1. Credit card complaints as a proportion of total complaints increased to 10 per cent,  from 6% in the first half of 2016.
2. There’s some surprisingly high variation between pure credit card firms. American Express reported 1.5 complaints per 1,000 accounts, while MBNA reported almost 8 times as many: 11.9 complaints per 1,000 accounts.
3. There were mixed results for the Co-Op Bank: 3.5 complaints per 1000 accounts represents a good result for ‘Banking and Credit Cards’, but 15.4 complaints per 1000 for ‘Home Finance’ is more than double the rate achieved by RBS
4. Women complain a lot less than men! 39 per cent of complaints come from women (this percentage was released by the Financial Ombudsman in their 2015/2016 report).

While it’s good to see more data made available to consumers, the FCA must go a little further and remove the need for a firm to receive 500 or more complaints per half year in order to be included in the published firm-level data.

It prevents us from seeing how most firms discussed on this website perform, including a bank like Triodos. With a new current account to promote, it would be helpful for consumers to see the FCA publish stats that make them directly comparable to their competitors.

The bigger picture is that there are huge strides being undertaken to encourage innovation and increase competition, but omitting smaller firms from this data feels like a lost opportunity for them. It prevents potential customers from having a source of FCA data to validate an account opening decision, and makes the already arduous task of changing consumer behaviour even harder.. and telling customers that RBS and HSBC get a lot of complaints is hardly going to shock us into closing our accounts. Tell us something we don’t know.