The publication of the latest complaints data can be a nervous time for some lenders as their dirty laundry is effectively hung out for all to see. It is one table that bank bosses are desperate not to top, with Financial Conduct Authority chief Martin Wheatley admitting that this fear compels lenders to try and improve their sales and complaints handling processes. The transparent system of publishing the complaints data in this manner doesn’t just help generate greater competition, but also helps consumers compare and contrast different lenders.
While it is the number of complaints upheld that is the most accurate in terms of identifying where consumers have a genuine case for redress, the overall number is still useful in identifying situations where the advice or service may have been below what the borrower was expecting. For example, Santander earned the unwanted mortgage complaints top spot according to the latest data with 14,080 grievances in the second half of 2012, a third of which (4,646) were upheld. It may be the latter figure which is recorded in the annals of the history, but that still leaves nearly 10,000 cases where customers felt suitably aggrieved to register their displeasure.
Even if we disregard say half of these cases as spurious or instances where the customer hasn’t properly understood the process, you are still left with a sizeable chunk of unhappy customers. Bank of Scotland was second in the latest hall of shame with just over half the number of complaints of Santander (8,628), but a far higher percentage upheld (53%).
Obviously likening our own data with that of such huge financial institutions isn’t measuring like for like given the greater volumes of mortgages they handle, but the percentage of cases upheld still give grounds for comparison and in insight to the complaint handling processes utilised. It’s also worth remembering that while we may not be welcoming new business at this moment in time, we still manage more than 40,000 live mortgage accounts. Our latest figures collated in February revealed that we received 13 decisions from the Ombudsman in 2012, all of which ruled in our favour.
In addition to this we received 98 complaints in the six months to December 2012, just 11 of which have been referred to the Ombudsman. We are justifiably proud that at a time of growing customer dissatisfaction with lenders – not to mention the proliferation of ambulance-chasing operations – we are bucking the trend and posting such impressive figures.
The reason our figures remain so low is because we make a concerted effort to engage with borrowers in potential difficulty as soon as possible, whereas larger lenders may not necessarily do this. Indeed, our size and approach allows us to more easily identify such cases which may slip under the radar at the big banks. It has also long been our policy that all complaints are reviewed at the highest level to reassure borrowers their displeasure is being taken seriously, which is unlikely to be the case at larger lenders. Such personalised service and speed of action is just one of the reasons why big is not always best when it comes to choosing one’s mortgage lender.
With the rulings of the Mortgage Market Review being implemented next year it is to be hoped that complaints against lenders start to decrease as more robust legislation is put in place, but lenders also have an obligation to review their processes to ensure they are as transparent and fair as they can be. Smaller lenders can learn from the big boys in many regards, but when it comes to handling consumer complaints, it wouldn’t hurt for the larger institutions to observe how their smaller counterparts are doing things.
Bob Young is managing director of CHL Mortgages