The Financial Ombudsman Service (FOS) has published its annual review for the 12 months to March 31 2019.
The overall annual complaints total of 388,392 is the highest for five years and represents a 14% increase from the overall total for 2017/18. In recent years, the payment protection insurance (PPI) scandal has dominated the Service’s workload, yet in the 2018/19 financial year PPI complaints were 3% down on the previous year, from 186,418 to 180,507.
Also, PPI no longer accounts for the majority of the complaints being made, with 46% being about this product. 39% of new cases were banking and credit complaints, 11% were about other types of insurance and just 4% concerned pensions and investments.
Even where total complaint volumes remain low, there were large increases in the numbers of complaints being made in some areas. There was an 89% rise in the number of consumer credit complaints, from 36,349 to 68,758; a 40% rise in the number of complaints about alleged fraud, taking the total to around 12,000; a 24% jump in pension and investment complaints, from 12,632 to 15,606; and an 8% increase in the number of cases concerning IT failures, taking the total to around 150,000.
Consumer credit now makes up one third of the Service’s non-PPI workload. Within the credit sector, complaints about payday loans were up 130%, from 17,256 to 39,715; guarantor loan cases were up 152%, from 210 to 529; home credit complaints were up 84%, from 808 to 1,846; and instalment loan cases were up by a massive 360%, from 1,122 to 5,162.
Chief ombudsman Caroline Wayman said of the rise in credit complaints:
“What we’ve seen in this sector has been unacceptable: in too many cases, customers have been left to struggle with unsustainable debt. Looking at short-term lending in particular, the proportion of complaints we upheld – around six in every ten – shows diligent lenders have been the exception. At the end of a volatile year that saw lenders collapse as a consequence of past unfairness, it’s vital that those remaining don’t allow history to repeat itself.”
Within the pensions marketplace, Self-Invested Personal Pension complaints rose by 86%, from 2,051 to 3,811; and Small Self-Administered Scheme cases jumped by 181%, from 27 to 76.
In the investment arena, investment-based crowdfunding complaints trebled from 26 to 78.
21% of the PPI complaints during the financial year were upheld by FOS, and excluding PPI, the uphold rate was 38%. For consumer credit, the overall uphold rate was 50%, however there were larger numbers of complaints being decided in favour of the customer for products such as short-term loans (around 60%).
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article