The number of mortgage and banking disputes more than tripled in the last 12 months while insurance complaints have doubled, official figures reveal today.
In the last year, a record 794,648 people contacted the Financial Ombudsman Service (FOS), 123,089 of whom made complaints, a 30% annual increase.
Although grievances about mortgage endowments fell by 70%, banking and insurance disputes surged. Complaints about bank charges – which are still subject to a legal dispute – increased 10-fold while gripes relating to current account providers increased eight-fold.
Complaints relating to controversial Payment Protection Insurance (PPI) were also up, with the majority of people concerned they had been mis-sold policies.
The figures come as consumer watchdog Which? issues a new warning about PPI. It claims that a third of consumers who have taken out this controversial type of insurance policy in the past five years may never be able to make a claim - meaning their policies are useless.
It estimates that as many as two million PPI policies – sold alongside loans, credit cards and mortgages – have been sold to people who were not eligible for cover.
This might be because they are self-employed or on a fixed-term job contract, aged 65 and over, or have pre-existing medical conditions.
However, Doug Taylor, personal finance campaigner at Which?, says people who think they have been mis-sold PPI should try and fight back. “We've always known that people were being mis-sold PPI, but we were still amazed to discover the scale of it,” he adds.
“If you have a loan and think you might have been mis-sold PPI, now's the time to fight back. Compensation could be just a letter away.”
The rise in financial complaints could be a result of the credit crunch and general dismal financial climate.
Sir Christopher Kelly, chairman of the FOS, says: “This timelast year we had hoped we were starting to see a downward trend incomplaint numbers for the first time. But instead, events during theyear have led to the ombudsman service receiving record numbers of newcases."