ao link
0 £0.00
This item was added to your basket
Credit Strategy homepage
LinkedIn
Twitter
Intelligence, Insight and community for responsible professionals in credit

“High proportion” of high-cost credit complaints upheld, while overall total drops

There has been an increase in the proportion of high-cost credit complaints that are upheld in consumers’ favour, according to the Financial Ombudsman Service (FOS).

The data sets out figures for complaints brought to FOS between April-June 2019 and contains information on numbers of enquiries, new cases and proportion of complaints upheld for different financial products.

 

The figures show the proportion of complaints that have been upheld has increased across a range of high-cost credit products.

 

The new figures show the proportion of complaints that have been upheld has increased across a range of high-cost credit products. High uphold rates include:

  • Guarantor loans – 83 percent
  • Instalment loans – 73 percent
  • Payday loans – 62 percent

However, the overall numbers of complaints has fallen over the same period, which the Consumer Finance Association (CFA) attributes to the Financial Conduct Authority (FCA) authorisation process that complaints management companies (CMCs) are going through.

 

The FOS has attracted criticism from alternative lenders over the number of complaints it has received from CMCs over the historical activities of high-cost, short-term lenders. Currently, each case that the FOS processes costs the lender approximately £500.

 

In June, Credit Strategy reported how these costs are threatening the existence of much of the alternative lending market.

 

Those costs and complaints have been implicated in the eventual collapses of several lenders, including Wonga and, more recently, Curo TransAtlantic and Instant Cash Loans.

 

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, said: “The increase in the proportion of upheld complaints about high-cost credit products shows that there is still more for businesses to do to respond to customer concerns, so if you are unhappy with a financial business, get in touch with the Financial Ombudsman Service and we’ll see if we can help.”

 

Jason Wassell, CFA chief executive, said: “In a system where the lender pays a fee win or lose, the volume of complaints can have a massive impact on small lenders. We are reliant on the regulators and the FOS asking questions about how customer data is being passed around, and whether any due diligence is carried out on any claims. This may be a temporary respite, lenders are still on the receiving end of some very poor practice by CMCs.”

Please login to continue reading this article.

Not a member?

Become a member

FREE registration. No credit card required

Register now
  • Stay up-to-date with industry news and appointments
  • Hear about events first
  • Read 1 free Premium article per month

Become a premium member

From as little as £3.48 per week

Become Premium
  • All the perks of a standard member plus:
  • Access to the entire Credit Strategy website
  • 12 months subscription to Credit Strategy Magazine
  • 25% discount to all conferences
  • Exclusive access to Premium Member only roundtables
  • 50% off award entry fees

GET THE LATEST INDUSTRY NEWS STRAIGHT TO YOUR INBOX

Upcoming events

Credit Strategy
LinkedIn page

Member of

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group