Payday lenders dominate financial complaints

Published by Helen Knapman on 05 September 2017.
Last updated on 05 September 2017

Payday lenders dominate financial complaints

Payday lenders and short-term loan providers are among the worst firms to correctly decide consumer complaints, new data reveals.

The Financial Ombudsman Service’s complaints data from the first half of 2017 reveals that most cases where it decided in consumers’ favour were in relation to payday lenders, short-term loan providers, and providers of credit to customers buying from retailers.  

For example, 77% of complaints about WDFC UK limited, which owns Wonga, and 77% of complaints about Casheuronet UK LLC, which owns short-term lenders QuickQuid and Pounds to Pocket, were awarded in favour of the complainant rather than the business.

Consumers can take gripes about financial providers to the free Financial Ombudsman Service if they’ve had no response or don’t agree with the response given by the firm involved.  

The Ombudsman says consumer credit complaints were up by almost a fifth in the first half of 2017 compared to the last half of 2016, taking complaints to nearly 15,000.

DSG Retail Limited, which owns brands including CurrysPCWorld and Carphone Warehouse, had the highest percentage of complaints upheld against it at 79%, although it only received 60 complaints over the period.

See the table below for the 10 companies with the worst complaint uphold record.

Financial providers with the worst complaint uphold rates 

Provider

Uphold rate

Number of complaints

DSG Retail Limited

79%

60

WDFC UK Limited

77%

1,434

Casheuronet UK LLC

77%

1,212

Express Finance (Bromley) Limited

77%

325

MEM Consumer Finance Limited

76%

565

Shop Direct Finance Company Limited

74%

1,498

Freemans Plc

74%

49

HFC Bank Limited

73%

753

Aviva Insurance Limited

72%

2,300

Advanced Payment Solutions Limited

72%

42

Source: Financial Ombudsman Service, for the period 1 January to 30 June 2017.

In terms of the 10 providers with the most complaints, credit card providers Capital One and MBNA had the worst uphold record, at 51% and 50% respectively.

Bank of Scotland had the most complaints over the period, totaling 20,541. However, it had a relatively low uphold rate in comparison of 22%.

This highlights how simply measuring performance based on the number of complaints isn’t always fair, as you could expect the firms with the most customers to get more complaints than companies with fewer users.

See the table below for the 10 providers with the most complaints, ordered by uphold rate.

Financial providers with the most complaints - ordered by uphold rate 

Provider

Uphold rate

Number of complaints

Capital One

51%

7,402

MBNA

50%

4,368

Financial Insurance Company Limited

45%

12,044

HSBC

40%

9,044

Barclays

39%

15,405

Lloyds Bank

37%

18,068

NatWest

27%

5,929

Santander

25%

6,271

Bank of Scotland

22%

20,541

Nationwide

16%

4,777

Source: Financial Ombudsman Service, for the period 1 January to 30 June 2017.

Complaints on the rise

Overall, the Ombudsman took on around 170,000 new cases in the first six months of this year.

This represents a 13% increase in complaints figures when compared to the last six months of 2016 – and reflects rises in almost every product sector, including PPI and banking.

PPI continues to be the most complained about product with almost 90,000 complaints, while complaints about banking and credit increased by 12% to around 47,000.

The average uphold rate for all businesses over the six-month period was 36% – and ranges from 3% to 79% across the individual businesses.

Leave a comment