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Unheeded complaints

The Bank of Spain needs to make lenders respond to the legitimate grievances of customers

The cases of preferred shares and home evictions have seriously eroded the prestige of Spain’s banks, which not so long ago in the 1990s up until 2007 could count on a credible reputation among the public. But the deterioration in public confidence is not due solely to two unfortunate cases. Bank customers also have the persistent feeling that their protests and complaints are of minor concern to branch managers and bank directors. The statistics back this up. Last year, the banks reversed their initial decision in the case of just 519 complaints out of the 2,800 that the Bank of Spain deemed legitimate.

That is to say, banks not only turn a deaf ear to the protests of their customers but also ignore the decisions made by the maximum authority in the banking sector. The motivation behind this could derive from the banks calculating the cost of maintaining their initial decision against the cost of failing to meet the demands of the complainant. Logically, the lower of these two costs is to ignore complaints even though the Bank of Spain has acknowledged them as well-founded because the bank in question can rely on the reluctance of customers to initiate legal action that would inevitably be costly and time-consuming.

The extent of the banks’ disregard for the satisfaction of their customers is unacceptable. They should pay more attention to the quality of the services they provide for which they charge high commissions, and of their own image. It could be argued that the protests against the issues of preferred shares and home evictions would have been less virulent if there had not been an upsurge over the past five years of public discontent with the banks — discontent that has a lot to do with a lack of information on deposits, loans and commissions and with the offhand manner in which the banks deal with customers’ grievances about perceived abusive practices.

The Bank of Spain cannot accept that its rulings be ignored in 82 percent of cases, even though they are not immediately binding. Before events reach the law courts, administrative regulations should serve to force the banks to rectify behavior that the supervisor has deemed improper or harmful to the interests of customers.

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