Six million Brits driven to claims management sharks by banks’ overcomplicated complaints process
One in ten (12%) consumers have turned to a claims management company to handle their banking complaint
A third (34%) of consumers who’ve been dissatisfied with their bank have never complained
Nearly half (45%) don’t directly lodge a complaint as they believe it’s not worth their time and almost a quarter (23%) view the complaints process as too complicated
Six out of ten (60%) consumers who used a claims management company say their claim was unsuccessful
A fifth (20%) of claims management customers say their experience left them feeling upset and a further 15% felt ripped-off
Uswitch.com is calling on banks to streamline their complaints process to encourage consumers to lodge their complaints directly.
Six million consumers (12%) have turned to a claims management company instead of lodging a complaint directly with their bank because many believed the complaints process would be too complicated – yet nearly two thirds of these complaints been unsuccessful. That’s according to new research from Uswitch.com, the price comparison and switching service.
Apprehension about complaining to their bank has led one in ten (12%) Brits to turn to a claims management company for help, while a third (35%) say they will consider doing so in the future. Of those that would look to do so, half (52%) believe it will improve their chances of making a successful claim and nearly four in ten (37%) say it would be easier than dealing with their bank direct.
Despite consumers being able to lodge a complaint directly with their bank, a third (34%) of those dissatisfied have never done so. Nearly half (45%) of consumers don’t believe it’s worth their time and almost a quarter (23%) view their bank’s complaints process as ‘too complicated.
Of those who have been through the complaints process, two fifths (41%) found it frustrating, a third (33%) found it time consuming and one in ten (12%) gave up on their complaint altogether. In reality, two thirds (66%) of consumers wouldn’t consider using a third party complaints company at all if the banks’ complaints procedures were more straightforward.
Claims management companies handle complaints against financial institutions on behalf of consumers. They usually charge a flat fee of a couple of hundred pounds or offer their services on a ‘no win, no fee’ basis, then claim a percentage of any compensation. This can be as high as 40% of the compensation awarded.
However, for many using a complaints manager can be a frustrating process. According to the research, nearly a quarter (24%) of those who used claims management companies felt angry about the experience and one in six (15%) felt they’d been ripped off.
Thomas Lyon, money expert at Uswitch.com says: “The current complaints process is hitting consumers with a double whammy. Not only have they received poor service from their bank but they are then required to trawl through an out of date complaints process just to have their grievances heard.
“The hassle involved with making a complaint has created an opportunity for claims management companies to take advantage of consumers, many of whom will end up being penalised twice.
“To help consumers feel more empowered to take their complaint directly to the bank – and to avoid the extortionate fees which claims managers charge – it is important that the banks make the process as straightforward as possible. Making complaining about helping customers, rather than requiring them to fight tooth and nail every step of the way, would be a good start.”
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FOR MORE INFORMATION
Rory Stoves
Phone: 020 3872 5613
Email: rory.stoves@uswitch.com
Twitter: @UswitchPR
Notes to editors
Research referred to in the release was conducted online by Opinium from 10th to 14th February 2017 among 2,004 adults. The sample has been weighted to reflect a nationally representative audience.
When asked “If you were ever unhappy with the way you were treated by a financial institution/bank, would you consider using a third party company to handle the complaint on your behalf?”, 12% responded either “Yes – I have used them in the past” or “No – I have used them in the past and I would never use them again”, 35% said “Yes – I would consider it”. 12% of 50,371,000 (ONS UK adult population) = 6,044,520.
When asked “Have you ever been dissatisfied with your bank or another financial institution in any way?”, 37% said ‘Yes’. Those who were dissatisfied were then asked “When you were dissatisfied, did you complain to your bank or the financial institution directly?”, 34% said ‘No’.
Those who had never complained to their bank but had been dissatisfied with service in the past were asked “You mentioned you were dissatisfied with the service you received but didn’t complain, why was this?”. 45% said “I didn’t think it would be worth my time”, 23% said “I thought the process would be too complicated”.
When those who had used a claims management company were asked “You mentioned you have used a third party to complain to a bank or financial institution in the past, was your claim successful?”, 54% responded ‘No – and I was not charged’ and 6% said “No – and I was still charged a fee by the claims company”.
When asked “Why would you consider using a third party company to handle your complaint?”, 52% said “They would have more experience and expertise in this area, so the chances of my claim succeeding would be higher” and 37% said “It would be easier than dealing with the bank / financial institution direct”.
When asked “When you complained to a bank or financial institution, how did you find the process?”, 41% said “I found the process frustrating”, 33% said “It was time consuming” and 12% said “It was time consuming”.
When asked “If banks’ complaints procedures were streamlined, I would be far less likely to consider using a third party complaints company / claims management company”, 28% said ‘Strongly agree’, 38% said ‘Agree’.
Source – Financial Times, February 2016
When those who had used a claims management company were asked “How did you feel following your experience complaining through a third party company?”, 24% said ‘Angry’, 20% said ‘Upset’, 15% said ‘Ripped off / conned’ and 15% said ‘Pleased – the process was easy and successful’.
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