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“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.”

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