Overdraft fees are consumer’s biggest banking gripe

Two of the biggest complaints that banks receive from customers concern overdraft fees and payment insurance (PPI).  Last year Barclays was the worst offender, according to the surveys, with more than 205,000 complaints registered in the second half of 2010.  Consumer group Which? said there were almost half a million complaints about PPI alone in the overall banking sector.

There were a lot of other complaints about banking services, including poor customer service that extended to the length of time for a check to clear, lack of sufficient personnel during busy hours, and incentives for new customers resulting in better rates and service for the new ones as opposed to those with existing accounts.  An MSN Money survey reported that only 9% of bank customers had no complaints about their bank.

Obviously, it’s up to the individual customer to keep track of a checking account balance in order to avoid overdraft fees.  However, even though banks have the legal right to charge them, they also have the option of waiving or reducing fees on a case-by-case basis where financial hardship or other mitigating circumstances are involved.  All banks are required to answer a complaint within eight weeks; if they do not, other recourse is available.

For complaints about PPI, you have six years or even longer on an expired policy; just be sure to have the original paperwork available.  If you have made a formal complaint to your bank and received no answer or one that is unsatisfactory, the next step (after eight weeks in the case of no answer) is to contact the Financial Ombudsman Service at http://financial-ombudsman.org.uk or you can call them at 0300 123 9 123 or 0800 023 4567, which is usually quicker, according to the FOS.