(Updates with comment from Lloyds in sixth paragraph.)
Sept. 2 (Bloomberg) -- The U.K.’s Financial Ombudsman Service said complaints about improperly sold loan insurance fell by 50 percent in the first half of the year, with Lloyds Banking Group Plc’s customers the most dissatisfied.
The FOS received 133,819 complaints about payment protection insurance, 70 percent of all new cases, compared with 266,228 a year earlier, according to the ombudsman. Lloyds, Britain’s biggest mortgage lender, had 62,132 disputes in total handled by the FOS, 52 percent lower, followed by Barclays Plc with 27,487, marking a 38 percent reduction.
U.K. banks have paid out more than 16 billion pounds ($27 billion) in compensation after selling insurance policies that were unsuitable for customers or didn’t provide the expected benefits. The Financial Conduct Authority, a British regulator, said last week banks will reassess 2.5 million PPI cases they previously rejected or potentially underpaid. Customers can refer disputed complaints to the FOS, which mediates on their behalf with financial-services companies.
“We’re seeing more and more people turn to us in frustration where they feel their bank or insurer simply doesn’t understand or really care,” Chief Ombudsman Caroline Wayman said. There’s “growing dissatisfaction from people about being processed industrially as a number rather than being listened to as an individual customer.”
Total complaints involving Royal Bank of Scotland Group Plc, the U.K.’s biggest government-owned bank, fell 40 percent to 13,654 and declined 28 percent for HSBC Holdings Plc to 13,240, according to the London-based FOS. Lloyds received 1.4 banking complaints per 1,000 accounts, compared with a rate of 2.3 at Barclays, 2.6 at RBS and 2.7 at HSBC.
“On a like for like basis, we continue to receive fewer banking complaints than any other major bank,” Martin Dodd, Lloyd’s group customer-service director, said in an e-mailed statement today. “The significant reduction in the number of referrals to the ombudsman is encouraging.”
The ombudsman ruled in favor of customers in 57 percent of disputes in the period.