Unaffordable lending was the most complained about issue in the 2020/21 financial year, the Financial Ombudsman Service (FOS) has revealed.
There were 57,571 new complaints about unfair lending practices last year, contributing to an overall increase in FOS enquiries.
The ombudsman reported 454,259 new enquiries during the 2020/21 financial year, and 278,033 new complaints – an increase of two per cent year on year.
Excluding the number of PPI complaints, the figures found that the volume of complaints rose by 58 per cent year-on-year.
This increase was largely driven by a 66 per cent increase in complaints about banking and credit products, FOS said.
Within this subsector, unaffordable lending was the most complained about issue, while current accounts were the most complained about product.
Home credit products had the highest uphold rate, with 83 per cent of resolved complaints being upheld.
“The Financial Ombudsman Service continues to provide an essential service, helping people with hundreds of thousands of complaints about financial businesses last year,” said Nausicaa Delfas, interim chief executive and chief ombudsman of FOS.
“Over the past year, we have seen demand for our service increase significantly, and our teams are working to provide resolutions in cases as quickly as they can.
“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.”
Consumer protection brand Which? noted that there had been approximately 18,000 complaints about fraud and bank transfer scams, and warned that more regulation is required to ensure that consumers are not placed in harm’s way.
“Not only have fraud and bank transfer scams grown in number in the past year, they have also grown in sophistication,” said Gareth Shaw, head of money at Which?.
“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.
“To stop firms wriggling out of giving victims their money back, the Payment Systems Regulator should work with the government to establish mandatory standards of consumer protection for all banks and payment providers, as well as making sure all banks publish data, including their reimbursement rates, to show how well they are preventing the harms caused by bank transfer fraud.”