Financial institutions have a long history of unethical and illegal behaviour. Abusive practices have resulted in numerous fines and penalties for banks, as well as damage to their reputation. Although governments and regulators claim to have strengthened supervision and regulation of the financial sector, the implementation of these measures has proved insufficient to ensure consumer protection.

The Payment Protection Insurance (PPI) scandal, which emerged in the UK in the early 2000s, concerned the mis-selling of insurance policies by banks and other financial institutions. These policies were sold with the intention that consumers would protect their loan or credit card payments in the event of illness, unemployment or other unforeseen circumstances.

However, many of these policies were sold to people who did not need them or did not qualify for them. In addition, payments to customers involved commissions in excess of 50%, thus preventing customers from actually benefiting from the policies’ coverages.

As a result of this inappropriate marketing, the Financial Conduct Authority (FCA) required the banks to pay billions of euros in compensation to affected consumers, who have been forced to pay out almost 60 billion euros. Sanctions and fines were not limited to British banks; Banco Santander had to set up a fund of 2 billion euros to cover possible claims.

Despite the compensation paid by the banks, the PPI scandal is far from over. Following a recent hearing in the UK High Court, it will be decided whether to extend the scope of the claims’ deadline, previously set for 29 August 2019, by up to six years to allow thousands of outstanding claims to be paid.

Claims at the Bank of Spain soar

Legal proceedings against abusive banking practices are increasing year after year. In 2021, customer complaints to the Bank of Spain increased by 61%, with CaixaBank, Santander and BBVA being the financial institutions with the highest number of complaints.

The banking malpractice of Spanish financial institutions since the financial crisis of 2008 is worthy of study. Abusive commissions, vulture funds, mortgage clauses, revolving cards, the preference shares fraud… these are just some of the abusive practices of banks, negligent and contrary to the interests of their customers.

The majority of customer complaints are concentrated on mortgages, cards and accounts and deposits. Eight out of ten complaints are directed against banks (83%), followed by credit unions (4.7%).

How to complain in the banking sector

The complaints’ system in the banking sector depends on the Bank of Spain, but before submitting any complaint to an official body, you should complain directly to the institution. If you go to a bank branch, you can ask for a complaint form, or send a letter by burofax or registered mail addressed to customer service.

The bank must respond within 15 working days in the case of claims related to payment services, and up to two months in the case of other claims. The next step is to wait for a response from the institution, but if it does not respond within these deadlines, or you do not agree with the resolution, you address your complaint to the Bank of Spain.

You can make your complaint in writing or online at the Banco de España’s Virtual Office, provided you have a digital certificate. This is a free, independent and impartial service, which does not take sides on behalf of consumers or banks, and which will decide whether the customer’s complaint is justified or not.

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