An annual report published by the Financial Ombudsman Service (FOS) shows surges in complaints about guarantor lending, instalment loans and logbook loans, in the year to April 2020.
The report shows that in total, the ombudsman received more than 270,000 new complaints about lenders and their service providers in the 2019/20 financial year, but alternative lending was one of few areas where annual increases spiked.
There were year-on-year increases in complaints about guarantor loans (1,043 received compared with 529 in 2018/19), instalment loans (10,880 on 5,162 the previous year) and point-of-sale loans (4,667 compared with 4,384).
Claims management firms will have been one of the drivers of such rises, but many alternative lenders have faced intense regulatory scrutiny and action; the latest being Amigo, the largest guarantor lender, which is under an FCA investigation over credit-worthiness assessments.
In total across all types of complaint, PPI remained the most complained about product, with over 122,000 complaints coming in as the claim deadline loomed.
Other headline figures from the annual data, published today show:
Caroline Wayman, chief ombudsman and chief executive of FOS, said: “This year FOS resolved well over a quarter of a million complaints. Each one of those involved a question of fairness, and someone whose life had been disrupted because of a financial dispute.
“Some businesses still need to put fairness first in how they handle customer complaints. A key part of our work in the future will be to proactively prevent complaints, to stop unfairness arising in the first place.”
Alongside the complaints data, FOS also published its future strategy, ‘Contributing to a fairer financial world’. The strategy, which will run to 2025, sets out priorities for enhancing the service; preventing complaints and unfairness arising and building capabilities.