Much of the summer 2017 issue of the Financial Ombudsman Service (FOS) newsletter is devoted to consumer credit complaints. In the introductory section, chief ombudsman Caroline Wayman refers to the fact that credit complaints to the FOS rose by 89% between the 2015/16 and 2016/17 financial years, having increased by 40% over the previous 12 months. However, she suggested that the rise in complaints could be due to an increased willingness to complain about debt issues, rather than due to any deterioration in the way firms are treating their customers. She acknowledged that the introduction of new Financial Conduct Authority rules on payday lending had yielded positive results, and that many of the payday complaints her organisation was seeing concerned historic issues.

Nevertheless, credit firms cannot afford to be complacent, and all firms would do well to read the case study examples in the newsletter, and consider whether they need to amend their procedures and/or alter the way they handle complaints. The case studies cited by the FOS include:

  • The FOS did not uphold a complaint from Mr S, who was unhappy that his bank had referred his case to a debt collection agency. However, the FOS did encourage him to contact the agency and try to set up a suitable repayment plan, whilst also obtaining assistance from a debt charity
  • A complaint from Mrs B was upheld after her finance provider refused to repair a phone obtained under a hire purchase agreement. The FOS ordered the firm to repair the phone and to refund the payments she had made under the agreement while the repair had been delayed
  • A complaint from Mrs H was rejected, after the FOS agreed that the finance provider had made a fair offer of compensation of £150 for a misunderstanding. She had cancelled the purchase of her kitchen but had incorrectly assumed the finance agreement had also been cancelled, which resulted in a default marker appearing on her credit file
  • Mr K failed in his effort to get compensation from his finance provider after they refused to pay for repairs. His agreement did not provide for any repairs to the television he bought on credit
  • A finance provider was instructed by the FOS not to apply the excess mileage charge on Miss N’s car finance agreement, as the firm failed to make it sufficiently clear to her that such a charge could be applied
  • A lender was ordered to refund all the interest and charges it applied to Mr G’s loan after the time he was allowed to draw down further funds. This facility was granted to him even though there was evidence he was in financial difficulty
  • A lender had to refund interest, fees and charges to Mr L after it granted him multiple payday loans without conducting adequate checks

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