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CSA: FOS debt collection statistics “fail to take account of progress"

The Financial Ombudsman Service’s (FOS) latest figures on the number of complaints received for debt collection “fail to mention the number of complaints has in fact fallen”, according to the Credit Services Association (CSA).

The ombudsman’s figures show it has dealt with around 3,300 inquiries about debt collection and took on over 1,000 new complaints for investigation in 2018.

The complaints cover credit and consumer loans, such as mortgages, credit cards and personal or business loans. They don’t include household debts such as utilities or council tax, as they are outside of the FOS’s jurisdiction.

 

Responding to the ombudsman, the CSA said in a statement that the level of complaints is “significantly lower than any other activity in the consumer credit space, and represents only 0.0021 percent of the 50,000,000 accounts handled by CSA members. Of these complaints, less than a third (31 percent) were upheld”.

 

It added: “It is also important to understand that the total number of complaints relates to debt collection activities as opposed to debt collection agencies per se, and therefore includes complaints raised against in-house collections teams within banks and other financial services institutions.

 

“A three percent fall in complaints against debt collection should be seen in the context of an 83 percent increase in complaints against credit reference agencies, a 73 percent rise in complaints against hiring, renting and leasing businesses, and a 64 percent increase in complaints regarding payday loans (17,256 complaints in 2018 versus 10,529 in 2017).”

 

Alongside its figures, FOS called on debt collection agencies to improve their practices for supporting vulnerable consumers. Of the complaints resolved by FOS last year, one in five (21 percent) of the complaints were about whether the consumer was being asked for the right amount of money. Around 13 percent were about customer service issues, including being contacted excessively, and 13 percent were where the customer told us that the debt being chased didn’t belong to them.

 

The CSA said: “Singling out debt collectors in this way fails to take into account the significant progress the industry has made in the last ten years, especially in the identification and treatment of vulnerable customers, work that has been acknowledged by the regulator, the ombudsman, and the various debt charities.”

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