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Payday lending complaints rocket 83% 29 May 2013

Complaints to the Financial Ombudsman Service (FOS) about payday lending soared 83% last year, the third highest rise of any sector except home credit (139%) and payment protection insurance (140%).

Credit reference agency-related complaints rose 58% while debt collection complaint numbers were also up 42%. In total, consumer credit complaints rose 14% from 7,416 to 8,470.

Consumer credit complaints from services such as debt collection and hire purchase accounted for 6.5% of new complaints to the FOS, excluding PPI claims last year.

Behind credit cards (15%), current accounts (15%) and mortgages (9%), consumer credit services accounted for one of the largest complained about areas outside of the top three (excluding PPI).

FOS received more of these complaints than those received for motor insurance (6%), savings accounts (4%), pensions (3.5%), with-profits (3.5%) and travel insurance (2%).

Of those complaints received in relation to banking and credit, the majority were in relation to charges or administration functions.

Natalie Ceeney, chief ombudsman at FOS, said the organisation has had to expand ‘significantly’ in the past year to deal with the high volume of cases being brought.

She explained: “We have been careful to develop responsibly. The ombudsman service is funded by the financial businesses that consumers complain about and we know how important it is to control costs and provide good value for money.”

 

 

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