Complaints relating to insurance and finance of motor vehicles have risen from 6,744 between July and September in 2022 to 11,869 for the same period this year.
The dramatic rise in complaints relating to motor vehicles means that they account for 25% of all complaints the Financial Ombudsman Service (FOS) received during the second quarter of this financial year.
The complaints relating to insurance are largely to do with valuation disputes, customer service issues, and delays in claims being paid. The majority were to do with cars and motorcycles and the ombudsman said they also received a small number related to caravans.
It comes as the price of car insurance has also risen significantly and is at a record high.
Of the complaints related to motor finance and consumer credit, 4,622 were related to hire purchase agreements and 1,569 were about conditional sale agreements.
There were also 4,036 complaints relating to insurance policies for cars and motorcycles. These three figures are the highest seen in over five years.
‘Too many speculative and poorly evidenced complaints’
A significant number of complaints sent to the FOS were not from individuals but from ‘professional representatives’ including claims management firms.
Of these complaints, more than 90% related to unaffordable or irresponsible lending while 70% were about fees, charges and commission.
Yet the upheld rate of complaints sent in by these representatives was just 8% compared to an upheld rate of 42% of complaints sent by individuals. The rate of upheld claims by the FOS for all complaints in all categories was 35% of those sent by these representatives.
James Dipple-Johnstone, deputy chief ombudsman at the Financial Ombudsman, said they are seeing “too many speculative and poorly evidenced complaints” sent in by professional representatives.
He said: “The vast majority of motor finance complaints are now brought by professional representatives. We’re seeing a mix of both good and bad practice, but with an uphold rate of just8%, it’s clear some representatives could do more to learn from our established approach about which cases are likely to have merit and advise their clients accordingly.
“It’s important to remind consumers also that they do not need to use a professional representative as our service is free, independent and easy to use.”
Across all categories, there were 46,716 new complaints sent to the FOS over the second quarter, compared to 38,470 in the same period of 2022. Current accounts and credit cards were also in the top-five most complained about financial products.
‘Concerning to see such a significant rise’
Abby Thomas, chief executive and chief ombudsman of the Financial Ombudsman Service, said: “Many people depend on their cars so it’s concerning to see such a significant rise in vehicle-related complaints.
“Buying a vehicle can be costly and stressful, and we’re now also increasingly hearing from people worried about whether they can pay their finance deals.
“What’s clear is that whatever the perceived issue, firms need to ensure they are treating customers with transparency and fairness.”
