Britain’s worst bank revealed!

by Jane Baker on 24 August 2010  |  26 comments
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Most UK banks are truly lacking in the customer service stakes, but find out which ones are the worst.

A new poll has revealed which banks should be thoroughly ashamed of themselves when it comes to customer satisfaction. The survey, carried out by Which?, proves the big high street banks are still falling seriously short of expectations.

The annual survey uncovers the best and worst financial brands in four key areas including current accounts, savings, credit cards and mortgages and provides an overall score for customer satisfaction.

The losers

So, which bank has won the notorious accolade of the worst bank in Britain? Bank of Scotland is right at the very bottom of the pile of 31 banks with an appalling overall score of just 43%. Not only has the bank done away with interest on its current accounts but customer service was rated as pretty appalling too. All this means Bank of Scotland fails to measure up well against the average across all banks of 59%.

But Bank of Scotland is not alone in offering dismal current account interest rates. According to lovemoney.com partner Moneyfacts, there are 79 accounts on the market which don’t pay any interest whatsoever.

It appears being part of the Lloyds Banking Group has also done absolutely nothing for customer service standards with its sister bank, Halifax, also faring badly in the poll. Halifax was rated just above Bank of Scotland, with a pathetic score of 46% despite offering reasonably competitive products in most areas.

The Lloyds Banking Group may now be the largest retail bank in the UK, but it’s quite clear it still has an awful lot to learn about treating customers well. Lloyds TSB itself only got a below average score of 53%, while Cheltenham & Gloucester - another cog in the Lloyds wheel - scored an ever poorer 50%.

Meanwhile, with a less than exemplary record for customer satisfaction, Abbey/Santander was third from bottom with 47%. The huge Spanish bank may be popular in its home country, but it’s doing very little to impress us here in Britain.

Northern Rock was one place above, scoring just 49% overall.

These results were echoed in our own lovemoney.com poll last year in which members agreed Santander brand, Abbey, was the worst bank in the country. The new Which? poll suggests it has done very little to up its game since. So, with persistently poor service, we are left questioning: do the big banks even care how their customers feel about them? Let us know your thoughts using the comments box below!

The winners

But while the big banks prove disappointing, it seems smaller online outfits do care about their customers. Here are the three winners in the Which? poll in reverse order:

In third place was Smile which is owned by Co-operative Bank. The bank’s ethical stance has clearly stood it in good stead leading to a total score of 79%. Many happy customers have rated Smile's level of customer service as one of the best.

Recent question on this topic

• epsh asks:

  Whats the best bank for current accounts and accessible savings accounts ? I also want online access with these.

  • 
    MikeGG1 answered "It depends on how much the savings are. If you are talking about £2,500 the answer..."
  • 
    epsh answered "I have been with Alliance & leicester, now Santander for several years. Previously with Lloyds TSB...."
  • Read more answers

The runner up was the One Account which scored an impressive 81% in the poll. The One Account, which is essentially an offset mortgage combined with your current account and savings, was originally launched by Virgin Money, but is now owned by the Royal Bank of Scotland.

But the overall winner was the HSBC-owned bank, First Direct which scored a grand total of 82%. The bank doesn’t necessarily offer the best products on the market - the 1st Account, for example, now pays 0% on in credit balances - but it seems its customers are prepared to sacrifice a little interest in return for a great banking experience.

In fact, the online bank has won more than 30 awards for customer service excellence, and also came top in our lovemoney.com poll where a whopping 93% of readers rated the bank as excellent or good. Check out The UK’s favourite bank account to find out why.

Right now, First Direct is offering a fantastic bonus of £100 to anyone who switches to the 1st Account (although you must pay in at least £1,500 a month to qualify). Read Three banks that reward loyalty to discover all the benefits of being a First Direct customer.

Compare current accounts and savings accounts at lovemoney.com

More: Earn 4% on instant access savings | Cut your mortgage rate to 2.29% - penalty-free!