‘Striking’ rise in complaints about credit

Business & Economy 13 Jun 2017
‘Striking’ rise in complaints about credit

'Striking' rise in complaints about credit, says ombudsman

More than half of complaints to the ombudsman are about PPI but growth in credit-related complaints is also concerning.

Image: More than half of payday loan complaints were upheld by the ombudsman

There has been a "striking" rise in the number of complaints about credit companies, including payday loans, according to the Financial Ombudsman Service.

In its annual review of complaints, the FOS said there were 10,529 complaints about payday loan companies in 2016/17.

This is more than a three-fold increase since the 3,216 complaints in 2015/16.

The ombudsman ruled in favour of the consumer in 59% of complaints.

There was also an increase in the total number of complaints about consumer credit products – almost doubling from 13,713 in 2015/16 to 25,984 in 2016/17.

Other sectors such as catalogue shopping, credit reference agencies, guarantor loans, debt collecting, hiring leasing and renting and point-of-sale loans also saw an increase in complaints.

But by far the biggest number of complaints in the past year were regarding payment protection insurance (PPI) – 168,769 of the total 321,283 complaints, or 53%.

Caroline Wayman, chief executive and chief ombudsman of the FOS said: "Whilst payment protection insurance (PPI) continues to make up a large proportion of the complaints we see, the most striking story this year has been the rise in complaints we've seen from people having trouble with credit. For example, we've seen around three times last year's volumes of complaints about payday loans.

"It's clear that financial difficulties and financial exclusion remain significant challenges for many people.

"The important thing is to speak up if you're struggling.

"Money is often very complicated, and our job is to unravel what's happened and find a fair way to put things right by looking at individual complaints."

Recent years have seen a tightening of regulations surrounding payday lenders, including limiting the amount of interest they can charge to prevent people getting further into debt.

Charities helping people with debt have also raised concerns over Bank of England figures showing strong growth in consumer credit at a time when living costs are also rising but wages are not.

Original Article

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