Phil MeekinView Profile
It has been revealed that in the 6 months to June complaints about payday loans have risen significantly while PPI still dominates Financial Ombudsman cases.
Complaints with regards to payday lenders have more than tripled in the first half of 2016. This is being put down to borrowers and the public becoming more aware of their consumer rights.
The Financial Ombudsman only deals with disputes when they cannot be resolved between the consumer and the financial institution. It is a last port of call for consumers unhappy with service that have already tried to work with their financial institution.
As a result, numbers of complaints received to the Ombudsman do not show the full extent of consumers unhappy with service or products from financial institutions.
In the first six months of the year, there was a 3% rise in overall complaints taking the number up to 169,132 new cases put to the Ombudsman. Showing the biggest rise during that time were complaints regarding payday loans. They have risen by 1213 and around 53% of those complaints have been upheld with the Ombudsman finding in the complainant’s favour.
However, The Consumer Finance Association (representative of some major payday loans providers) claims most customers feel they are treated better by payday loans companies than other lenders. This likely comes as a reference to a recent survey by Smart Money People which revealed that 95% of short term credit customers felt they were treated fairly.
Speaking to the BBC, chief executive of the Consumer Finance Association, Russell Hamblin-Boone, had this to say about these recent Ombudsman findings; “We are obviously disappointed with the number of complaints, but this must be viewed in perspective. Of around a million loans funded there were about 2,000 upheld complaints.”
It is PPI complaints that still dominate the Ombudsman’s workload however, with 91,381 new cases in just six months. That equates to around 54% of their workload during this time, a huge number when you consider the Ombudsman deals with all manner of complaints concerning banks, insurers and other financial institutions.
The Financial Conduct Authority (FCA) would like to set a June 2019 deadline for claiming for PPI, after banks have already paid out £24bn in compensation. Right now though, this seems like a very optimistic target for the FCA to set when complaints figures for PPI are still so high.
If you are unhappy with your financial provider’s services, make sure you know your consumer rights regarding complaints and the procedure you will need to follow. You can find out more about this on the Financial Ombudsman website.