Banks, insurers and other financial services groups with the worst record for customer complaints are to be named and shamed by regulators after years of keeping their shortcomings secret.

For the first time, all big financial organisations will be compelled to publish complaint numbers, which will then be assembled by the Financial Services Authority (FSA) into a database that can be used to reveal the best and the worst in the industry.

The FSA yesterday overruled long-standing objections from banks and insurers and announced plans to press ahead with the scheme, under which companies will be forced to publish half-yearly numbers from next July. The FSA will provide its own industry-wide figures from September 2010.

Dan Waters, the FSA’s director of retail policy, said that the new transparency would give companies an incentive to deal more effectively with complaints and help to raise standards.

Companies with the largest number of complaints will have to disclose how many they have received and how many they have dealt with, the percentage resolved within eight weeks, and the percentage upheld.

They will also be asked to provide contextual information, such as complaints per thousand accounts. The data will be divided into five product areas — banking, home finance, general insurance and pure protection, life and pensions, and investments. Financial organisations in the UK log about three million formal complaints each year. Figures are passed to the FSA but until now it has declined to publish them, agreeing with companies that there were legal difficulties and there was no way of presenting results fairly.

The Financial Ombudsman Service has announced plans to expose companies triggering the most complaints to reach the FOS together with the proportion of complaints upheld, beginning in September this year. But the FOS sees only complaints that have escalated beyond the organisation without being resolved.

Which?, formerly the Consumers’ Association, applauded the news, for which it has been campaigning years.

The Association of British Insurers argued that the published information would not be meaningful, and the British Bankers’ Association said that the measures were too crude and the system would be open to manipulation. There are also concerns that firms have different thresholds at which they register customer moans as formal complaints. The new regime could encourage companies not to register some complaints to yield better results in in league tables.

The FSA said that it would limit the rules to firms receiving more than 500 complaints per six months and estimated the costs for the industry at an upfront £565,000 plus an annual £299,000.