Consumer credit complaints surge

COMPLAINTS made against consumer credit companies surged during the first half of 2018, according to the latest figures from the Financial Ombudsman Service (FOS).

The latest complaints data shows that almost 29,500 grievances were submitted against consumer credit companies in the first six months of the year.

That equates to an 80 per cent rise from the same period last year.

Defunct payday lender Wonga received 4,513 complaints in the first half of the year, an increase of 216 per cent year-on-year.

The £550 cost of processing each of these complaints was a major factor leading to its collapse.

Read more: FCA consults on widening SME access to Ombudsman

CashEuroNet, which owns QuickQuid and Pounds to Pocket, fared even worse as it received 4,692 complaints in the same period.

This represented a 323 per cent increase and could cause potential administration costs of £2.5m.

Overall the FOS received 201,600 complaints during the first half of the year, which is a 22 per cent increase on the first half of 2017.

Payment Protection Insurance (PPI) complaints accounted for over half of the total reported by the FOS.

Read more: Consumer credit made up the bulk of financial complaints last year

The two worst offending banks were Bank of Scotland and Lloyds Bank with over 35,000 complaints between them.

Parent company Lloyds Banking Group has set aside a further £550m to deal with PPI, bringing its total costs relating to the mis-selling scandal to £19.2bn over the past eight years.

Barclays Bank topped the list for the most individual investment complaints in the first half of this year.

FOS data shows Barclays received 476 consumer complaints related to investments – more than double that of any other firm.

Read more: P2P lenders may face a higher bill from City watchdog