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Credit Cards & Loans

Payday loan and credit complaints soar

Paloma Kubiak
Written By:
Paloma Kubiak

Complaints about consumer credit products and services increased by 40% in 2017/18, according to the Financial Ombudsman Service.

Gripes about payday lenders alone jumped 64% to 17,200 from 10,500 a year earlier. The ombusdman upheld 61% of the complaints about payday loans.

In total, FOS received 1.45 million enquiries from disgruntled consumers, and dealt with nearly 340,000 new complaints.

The bulk of its workload continued to be around PPI – it received 186,400 new complaints, up 10% from the previous year.

FOS reported a sharp drop in the number of new complaints it received relating to mortgages, though it noted worries over interest-only deals.

In its annual report, the Ombudsman said it received 8,917 new mortgage complaints, down 14% from the 10,428 from 2016/17.

The number of mortgage complaints upheld has also fallen over the same period, from 31% last year to 23%.

Caroline Wayman, chief ombudsman and chief executive of the FOS, said: “While continuing to manage the fall out of mis-sold PPI – with complaints still reaching us in their hundreds of thousands, accounting for over half of all those we receive – we’ve been ensuring that we’re able to respond to the problems people are having today, and that we’re ready for the future too.”

The ombudsman, added: “Over recent years we’ve highlighted the rising volumes of people telling us they’ve had trouble after borrowing money.

“On one hand, this reflects shifting preferences in how people choose to pay for things. However, 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.

“It’s also remained clear that, as high profile cybercrime hits the headlines, risks to people’s money may lie closer to home. Over the last few months we’ve helped people who’ve found themselves out of pocket after buying “self-funding” solar panels – and those who’ve faced selling their home because they can’t pay off their interest-only mortgage.”