Complaints about consumer credit rise by 40%

30 May 2018
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Consumers continue to voice more complaints about credit products and services, with the number of complaints rising 40% year-on-year according to arbitration body the Financial Ombudsman Service.

However, while this is a significant increase, it is in fact down from an 89% rise last year, suggesting more firms are now acting to treat customers fairly.

The Financial Ombudsman Service says it has seen a particular increase in the number of complaints about high-cost credit products, such as payday loans and instalment loans. Of 17,256 complaints made about payday loans, six in 10 were upheld by the Ombudsman.

In comparison, fewer than one in three (28%) complaints about credit cards were upheld.

Chief ombudsman Caroline Wayman comments: “We’re concerned that some lenders just aren’t doing enough to ensure people’s borrowing is sustainable – or aren’t responding constructively to their customers’ concerns. Looking in particular at high-cost credit, payday loans alone accounted for more than 17,000 new complaints. And we found in around six in 10 cases that people hadn’t been treated fairly by their lender.

“People buy a whole range of things on credit – whether it’s using a credit card, or taking out a loan or finance deal. But because the actual goods and services involved aren’t “financial” – whether it’s a car or a new kitchen – people aren’t always aware we can help.”

Moneywise has contacted the Consumer Finance Association – which represents payday lenders – for comment. Its chief executive, Jason Wassell, says: “Obviously our members take complaints very seriously. However, there are a number of reasons why we are seeing such figures reported, including the historic nature of these complaints, strongly held disagreements with the FOS on interpretations and the growing involvement of Claims Management Companies looking to generate complaints.

”What we can say, is that most customers borrow without any problem. Changes in recent years mean that people are paying less to borrow, they are less likely to attract additional fees and costs are capped.”

Comments

In reply to by anonymous_stub (not verified)

I'm still trying to fathom out how and why so many people get into so much personal debt. I'm a confirmed 'wrinkly' and all my life heeded the advice given to me by my Dad which-with a few exceptions-was not to buy anything one couldn't afford. Is there such shame in going without items that somehow now seem indispensable e.g., the Sky subscription, the latest mobile phone / TV/ gadgets / X-boxes; the 5* holidays, the latest model of car etc. It doesn't mean living in penury or doing without all and everything. It just means living within them. I may not have aspired to, or risen to the pinnacle of consumerism, but then neither am I in any debt, and never have been. The mortgage is paid and I'm modestly retired. And you know what? I don't miss anything I haven't got and don't envy those that have. Be cautious with debt and don't over-extend yourself right from the start. Evaluate everything and don't take on expenses you really can't afford or don't really need. It works and you'll be happier, less stressed and still comfortable. There's really no shame in doing without.

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