You are here: Home - Saving-Banking - News -

Banking problems drive sharp rise in complaints

Written by:
The number of complaints taken to the Financial Ombudsman Service (FOS) has jumped significantly over the past 12 months, driven by issues with banking and credit products.

While the overall number of complaints to the FOS only rose by 2%, when you exclude issues related to payment protection insurance (PPI) there is a whopping 58% rise in complaints, with 235,993 new non-PPI complaints up from 149,315 in 2019/20.

The FOS is a free arbitration service, established to help in the event that a financial firm doesn’t deal with your complaint to your satisfaction. You need to complain to the firm that you believe has wronged you directly first, but if they don’t rectify the situation within eight weeks, you can then take the complaint to the FOS.

Upset about banking

The FOS said that this spike in complaints was largely the result of greater numbers of complaints about banking and credit products, with the number of issues taken to the Ombudsman jumping by 66% over the year.

Current accounts were the most complained about product, while unaffordable lending was found to be the most complained about issue.

It’s not just banking that is upsetting us though. The annual report from the FOS revealed that the number of complaints about investments and pensions almost doubled, from 10,920 in 2019.20 to 20,854, while the number of issues with insurance rose by more than a third to a total of 44,487 complaints.

While the number of non-PPI issues has risen, the number of complaints being upheld has actually dropped, from 44% last year to 40% this time around.

Nausicaa Delfas, interim chief executive and chief ombudsman of the FOS, noted that the body had seen demand for its services “increase significantly” over the last year.

She added: “The sharp increase in complaints about issues other than PPI is a reminder that it has rarely been more important for financial businesses to support their customers when things go wrong. As people continue to deal with the impact of Covid-19 on their lives and finances, they know they can come to our service if they’re not happy with how a financial business has treated them.”

The FOS data follows figures from complaints service Resolver which found that problems with online shopping has dominated its own workload over the last year.

Banks passing the buck on scams

Gareth Shaw, head of money at Which?, noted that part of the rise in banking complaints was likely down to bank transfer scams, which have grown not only in number but in sophistication too over the last year.

He continued: “The industry code on push payment scams was designed to ensure that those who lose money to criminals are reimbursed when they are not at fault, yet a worrying culture of banks blaming victims for falling for these tricks has emerged.”

Shaw called for firms to stop “wriggling out” of giving victims their money back, with banks pushed to publish data on how well they are preventing the harms caused by bank transfer fraud.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week