Time to pile the pressure on your underperforming bank

Complaints about British banks rose more than 50 per cent last year alone, as rising charges and poor customer service enraged ever more consumers.

The Banking Code Standards Board, which released the figures this week, also said it had uncovered a worrying trend of complaints being handled poorly. Not only are banks' customers getting an increasingly bad deal from their banks, it warned, but their complaints are being ignored.

The watchdog said that 11 per cent of the calls it had received between October last year and this January related to poor complaints handling, compared to a share of just 2 per cent of calls a year earlier.

Other complaints have a more familiar look:

CHARGES

Fees for going overdrawn or making late payments to credit cards have risen in recent years. So when charges are made in error, or when banks hit you with multiple fees, be quick to complain.

Most banks will not only charge you for busting your overdraft limit, but will also hit you again if direct debits or other debits are made on your account before you have been able to put it back in the black.

Stuart Glendinning of Moneysupermarket, the price comparison service, says that although most banks will cap the maximum amount of charges they can levy for one offence, this can still be as high as £80. He advises customers to appeal against the charges.

"Banks tend to be fairly receptive to people who ask for charges to be scratched - especially if it's your first offence," Glendinning says. "Remember that you can always threaten to take your business elsewhere."

CUSTOMER SERVICE

Although increasing numbers of people now bank online or by phone, banks still receive a significant number of complaints about poor service in branches - long queues, or encounters with uninformed or impolite staff, are often sufficient to trigger a formal complaint.

Banks have also received a large volume of complaints about the fact that they run their call centres out of India, or that customers have to wait for a long time to get through to an operator when they need one.

If you have suffered a catalogue of such experiences, write a stern letter to a senior figure in the organisation requesting compensation for your inconvenience. The threat of taking your account elsewhere almost always provokes a response.

FRAUD

Although banking fraud has fallen since the introduction of chip and Pin technology, thousands of people are ripped off every year. Under the terms of the Consumer Credit Act, credit-card companies must reimburse all fraud beyond the first £50, but if your debit card's involved, it can be more complicated.

Customers are sometimes told they must foot the bill for any fraud that involves the use of your Pin, but this is not true. If the bank cannot prove you were negligent, the Banking Code says it must pay.

Sandra Quinn of Apacs, the card industry trade body, says: "The burden of proof lies with the bank to show that you've been negligent."

If you feel you've been unfairly treated by your bank over fraud, and have no success with initial complaints, appeal to the Financial Ombudsman Service (FOS), which will cast an independent eye over your case - and has the power to force the bank to pay compensation if it rules in your favour.

TRANSFER OF ACCOUNTS

Moving your bank account should be straightforward. In theory, all you should need to do is sign the necessary documentation and - hey presto - all your direct debits, standing orders and funds will simply be switched over.

In practice, things often go wrong, and if a direct debit is not switched over in time, customers can find themselves getting fined or charged interest on unpaid bills, and can even be landed with black marks on their credit files.

Inevitably, this is the source of a large number of complaints, and as with all customer service failures, you should demand that your bank compensate you for any financial loss you suffer and for the time you have spent ironing the issues out.

ADVERTISING

Financial services companies are notorious for making promises they cannot keep, or using "smoke and mirrors" when promoting their products.

Adverts may boast that Bank X has the cheapest car insurance on the market when, in practice, you'll only get the best rate if you're a 43-year-old woman living in Pembrokeshire.

Customers are often disillusioned when they are not offered the typical rate that is advertised on a loan or credit card. Under current legislation, lenders can only advertise a rate that they offer to two-thirds of their customers. Inevitably, however, some will not get this deal.

Again, consumers' strongest card is to threaten to take their business elsewhere. If you're a long-standing customer, this tends to be even more effective.