Bankers hoping to repair their tarnished reputation in the public eye will have wanted to avoid this morning’s newspapers, which carried reports that 7,000 people complain about bank services every single day.
The figures, which were compiled by the watchdog the Financial Services Authority (FSA), for the first time include a breakdown showing how each high street bank performed.
The Daily Mail however went a step further than its rivals in the press by reporting on a rather eye catching statistic.
It claimed that: “In some areas, such as mortgages, more than 70 per cent of customers were found to have been given bad advice or poor service.”
Having previously campaigned so vociferously for increased bank lending, has the Mail hit on another problem in the high street finance sector?
The problem with such an interpretation is that it is not immediately clear from the FSA report where the 70 per cent figure comes from.
Across all high street banks, only 44 per cent of complaints (25,179 of 56,393) made in relation to home finance were upheld.
We therefore got in touch with the reporters responsible for the Mail article – Sean Poulter and James Coney – who told us that they were referring to the proportion of complaints submitted to the Royal Bank of Scotland (RBS) that were upheld. According to the FSA breakdowns, 71 per cent of the 1,419 complaints received by RBS were upheld.
However the claim as it appears in the paper is problematic for a number of reasons.
Firstly, it is not at all clear that the figures quoted refer to the Royal Bank of Scotland only. Whilst the preceding paragraph mentions that “state-owned banks such as Royal Bank of Scotland-NatWest are among the worst offenders”, there is nothing to link this to the subsequent claim.
More importantly, however, the proportion of complaints upheld is not the same as the proportion of “customers… given bad advice or poor service,” as only a small proportion of mortgage customers actually made a complaint in the first place.
According to the Council of Mortgage Lenders (CML), there were 11.4 million active mortgages in June 2010, with 63,500 new mortgages advanced over the first six months of the year – the period covered by the FSA statistics.
The 56,393 mortgage customers that lodged complaints therefore represent a tiny fraction of the total number of mortgage customers (0.5 per cent).
For the Mail’s claim that “more than 70 per cent of customers were found to have been given bad advice or poor service” to be accurate, banks would have had to have upheld nearly 8 million complaints. They actually upheld little over 25,000.
Even if the claim is restricted to mortgage customers at the Royal Bank of Scotland it doesn’t add up. RBS holds approximately 1.3 million mortgage accounts, but upheld 1,007 complaints in the first half of the year, approximately 0.8 per cent of its customer base.
Whilst the Mail can point to some figures in support of its claim, the way in which they are used does not stand up to closer scrutiny. Even if one sets aside the fact that it is difficult to infer from the claim that the authors are referring exclusively to RBS, the claim is nevertheless inaccurate.
The FSA data only records the proportion of complainants whose grievances were upheld, and cannot comment on how big a share of a bank’s mortgage customers this might refer to. By suggesting otherwise, the Mail is, in the words of the CML, “being misleading”.
Full Fact will be asking the Mail to clarify its article, and will update when progress has been made.