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FOS: Complaints about short-term loans more than double

Complaints made to the Financial Ombudsman Service over high-cost, short-term lenders soared by 130 percent in 2018-19, according to its annual report.

There were nearly 40,000 new complaints brought last year about high-cost, short-term credit, up from 17,000 the previous year.

 

Overall, complaints about financial services rose to a five-year high, with more than 388,000 new complaints being made to the service in the last financial year, a 14 percent increase on the previous year. While the number of payment protection insurance (PPI) complaints dropped, it was more than offset by increasing complaints and poor practice from businesses in other areas.

Other than PPI, banking and credit services made up the largest portion of complaints, accounting for 149,933 (39 percent) of those received by the ombudsman.

 

Consumer credit products and services, such as hire purchase, debt collecting and catalogue shopping, attracted 33 percent of complaints, up from 24 percent last year. Current accounts accounted for 20 percent of complaints, while credit cards made up seven percent of complaints. Mortgages accounted for five percent.

 

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, said: “Too often we see that the interests of consumers are not hard-wired into financial services. This marks a five-year high in the number of complaints that consumers have brought to us, and the behaviour we’ve seen from some businesses is simply not good enough.

 

“While we do see examples of businesses responding well to customer concerns, we also see many firms who don’t. Our message to businesses is that practices must improve. If someone has a problem with a financial service, they can come to us with confidence and we will work with them and the business to resolve the issue.”

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