Complaints about banks have soared in the past two years, reflecting customers’ growing dissatisfaction with poor service and hefty bank charges, the Financial Services Authority (FSA) said today.

FSA figures showed a 122% increase in complaints about banking and loans, from 608,620 in July 2006 to 1.3m in June 2007. This included a 259% increase in complaints about overcharging, and a 71% increase in those about poor customer service.

However, the number of complaints decreased in the second half of 2007 and 2008 following the FSA’s decision to allow banks to postpone dealing with complaints relating to unauthorised overdraft charges until a court case regarding their unfairness is resolved.

The regulator’s ruling means that while banks must record all complaints they receive, they are not currently required to include them in their complaints return forms to the FSA.

Nonetheless, complaints still rose by 32% over the entire 2-year period, from 760,000 to 1m, whilst complaints against building societies nearly doubled from 38,989 to 79,349.

Consumer group Which? said that the level of complaints reflected poorly on the banking industry. “Financial firms simply aren’t treating consumers well enough and things must change if the industry is to rebuild its reputation,” said Phil Jones, personal finance campaigner for the organisation.

Over the two-year period, complaints about credit cards more than doubled from 73,000 to 151,000, whilst complaints regarding cash Isas more than quadrupled from 8,700 to 39,259.

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