Credit card complaints to ombudsman service reach record high

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Complaints about bank cards reached a report excessive within the last three months of final 12 months, in keeping with the Monetary Ombudsman Service (FOS).

Customers lodged 5,660 gripes about their bank cards between October 1 2023 and December 31 2023 – the best stage the service has seen for a three-month-period. Its comparable knowledge goes again to the primary quarter of the monetary 12 months 2014/15.

The organisation, which acts as a free decision service for customers and their monetary suppliers, mentioned 3,086 of these complaints had been because of perceived unaffordable or irresponsible lending by monetary corporations.

Throughout the identical interval a 12 months earlier, there had been 3,216 bank card complaints, of which 665 had been about irresponsible or unaffordable lending.

Practically three quarters of the bank card and unaffordable lending complaints highlighted within the new figures had been introduced by skilled representatives, akin to claims administration firms and legislation corporations, up from 1 / 4 of those complaints a 12 months earlier.

The FOS mentioned client complaints have indicated that particularly, folks imagine monetary suppliers ought to have stepped in over persistently excessive credit score balances, excessive credit score limits or offered decrease rates of interest.

Abby Thomas, chief government and chief ombudsman of the FOS, mentioned: “On condition that many individuals are struggling within the present financial atmosphere, it’s regarding to see such a major rise in bank card complaints.

“Owing vital quantities of debt could be nerve-racking and it’s vital that customers are handled pretty and transparently by monetary service suppliers.

“Lenders have an obligation to assist their clients no matter their circumstances and are obliged to assist people who find themselves combating debt.”

In whole, throughout quite a lot of monetary merchandise, the ombudsman acquired almost 7,500 complaints about perceived irresponsible and unaffordable lending within the newest interval, of which 70% had been from skilled representatives. The uphold charge for these complaints introduced by skilled representatives which the ombudsman resolved in the course of the interval was 14% in contrast with 44% for customers who introduced complaints on to the service.

Viv Kelly, ombudsman director for client credit score on the FOS, mentioned: “The overwhelming majority of unaffordable lending complaints are being introduced by skilled representatives. Whereas skilled representatives have an vital function to play, we’re at present seeing some poorly evidenced complaints.

“In these situations, uphold charges could be significantly decrease than if a client brings a criticism on to our service.

“Customers don’t want to make use of an expert consultant to carry a criticism to our service. Individuals can come on to our free, impartial service and we’ll see if we will help resolve their criticism.”

Total, throughout all criticism classes, the ombudsman acquired 47,868 new complaints within the last quarter of 2023. In the identical interval a 12 months earlier, it acquired 41,303 new circumstances.

Apart from bank cards, the opposite 4 classes within the prime 5 most complained about merchandise had been present accounts, rent buy (motor), automotive/motorbike insurance coverage and buildings insurance coverage, all of which noticed year-on-year will increase.

Present accounts proceed to be essentially the most complained about product with 7,804 gripes recorded within the newest interval. Fraud and scams are nonetheless the principle driver of present account complaints, the ombudsman mentioned.

Bank cards are the second-most complained about product.

Rent buy (motor) is the third most complained about product with 5,419 complaints in the newest quarter. Motor finance fee complaints made up round half of the brand new rent buy (motor) complaints the ombudsman acquired.

For the reason that newest complaints interval, the Monetary Conduct Authority (FCA) has introduced a overview of historic motor finance fee preparations and gross sales. As a part of this, it has paused a deadline for motor finance corporations to supply a last response to customers’ complaints about some fee fashions. It has additionally prolonged the time for patrons to strategy the ombudsman if corporations’ responses haven’t resolved circumstances.

Automobile/motorbike insurance coverage is the fourth most complained about product with 4,123 gripes within the newest quarter.

Buildings insurance coverage complaints, in fifth place, attracted 1,666 complaints.