Lloyds receives 762,000 complaints over services

The Financial Conduct Authority said overall complaints across the industry rose by one per cent to 3.4 million, driven by a further increase in cases relating to the mis-selling of insurance on loans and mortgages.

Complaints about payment protection insurance (PPI) increased by five per cent compared with the first half to 2.2 million, accounting for 63 per cent of all cases.

The next most complained-about products were current accounts, which received 304,000 complaints, down six per cent on the first half.

Lloyds, which is 39 per cent owned by the taxpayer, sold more PPI policies than rivals. It received 762,000 complaints overall, compared with 427,000 at Barclays and 378,000 at Royal Bank of Scotland.

Complaints decreased across all product categories except ‘insurance and pure protection’ which includes PPI.

The level of compensation being paid out on PPI fell during the period, however, to £2.9m from £3.2m in the first half, suggesting banks are successfully rejecting more claims than before.

The head of the Financial Ombudsman Service, which settles disputes where banks and their customers cannot reach agreement, said in March that the number of PPI claims against banks had reached “staggering” levels and would take years to pay back.

The policies were meant to protect borrowers against sickness or redundancy but were often sold to customers who did not want or need them or were ineligible to claim.

During the second half of last year, Clydesdale Bank, which includes Yorkshire Bank, opened 35,000 new complaints covering all product groups.

Vanquis Bank, owned by Bradford-based Provident Financial, opened 15,900 new complaints.

Yorkshire Building Society opened 8,700 new complaints. Leeds and Skipton building societies opened 1,700 and 1,400 new complaints respectively.

Martin Wheatley heads the new Financial Conduct Authority.