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.”