Payday loan disputes soar as complaints about financial services hit a five-year high

Published by Stephen Little on 15 May 2019.
Last updated on 15 May 2019

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Complaints about the financial services industry have hit a five-year high, with grievances about payday lenders surging, according to the Financial Ombudsman Service.

The dispute handler says that 388,000 new complaints were made to the service in the last financial year - up 14% from the previous year.

It says that while the overall number of PPI complaints has dropped, this was more than offset by “increasing complaints and poor practice from businesses in other areas”.

Payday loans were one of the most complained about products, with the behaviour of some payday lenders labelled as “unacceptable”.

There were nearly 40,000 new complaints about payday loans brought last year - a staggering 130% rise.

The watchdog says that “diligent” lenders were the exception, with people being left to struggle with debt in too many cases.

Consumers can complain 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. 

Banking and credit complaints were up 8% on the previous year, with 150,000 complaints.

It comes after a slew of IT system failures last year from banks including Barclays, NatWest and TSB which left millions of customers unable to use their accounts.

The ombudsman says that “it is clear that some banks are not getting a handle on the individual impact IT failures have on consumers”.

Complaints about fraud and scams increased by more than 40% in the last last year, with over 12,000 received.

Authorised Push Payment (APP) fraud - when people are tricked by a fraudster into authorising a payment to be made to another account – is also helping to drive complaints.

Over 12,000 complaints about fraud and scams were received in 2018 - up more than 40% on the previous year.

There was a dramatic increase in home emergency cover and buildings insurance complaints. The ombudsman says that in a number of cases, insurers didn’t do enough to recognise the impact of avoidable mistakes in their process.

PPI complaints made up less than half of new complaints received, for the first time in 10 years.

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, says: “Too often we see that the interests of consumers are not hard-wired into financial services.

"This marks a five-year high in the number of complaints that consumers have brought to us, and the behaviour we’ve seen from some businesses is simply not good enough.

“While we do see examples of businesses responding well to customer concerns, we also see many firms who don’t. Our message to businesses is that practices must improve. If someone has a problem with a financial service, they can come to us with confidence and we will work with them and the business to resolve the issue.”

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This Country has made massive

This Country has made massive strides for people with major and minor physical disabilities to ensure they are not disadvantaged. Considering mental health is now high on the agenda, isn't it time for some rigid legislation to stop the targeting of people with low financial acumen. Come to think of it, we could all do with this to some degree.