Payday lender complaints have tripled over the last year, reveals data
Complaints about payday loans increased by 227 per cent over the period and all complaints relating to consumer credit increased by almost 90 per cent to just under 26,000
Complaints relating to payday lenders have tripled over the past year, according to data published by the financial consumer rights watchdog.
In its annual report published on Tuesday, the Financial Ombudsman Service said that it had received more than 320,000 complaints over the past year, with the majority of those relating to PPI.
Just over 30 per cent were banking and credit complaints, 12 per cent related to insurance services and around 4.5 per cent were to do with investments and pensions. Complaints about payday loans increased by 227 per cent over the period and all complaints relating to consumer credit increased by almost 90 per cent to just under 26,000.
The biggest rise was in complaints about instalment loans, which are generally paid back over a long period of time. The number of those rose by 318 per cent to 883 from just 211 in the previous year.
A total of 64 per cent of all complaints related to banks, down from 72 per cent in the previous year. General insurers were the subject of 14 per cent of complaints and 6.5 per cent of complaints were directed at consumer credit businesses.
Caroline Wayman, chief executive and chief ombudsman at FOS, described the rise in complaints - especially relating to credit – as “striking” but said that the increase was likely the result of consumers having better access to credit.
In January, figures from the Bank of England showed that unsecured debt had reached its highest level since 2008.
“This year we continued to engage with the short-term lending sector – including talking to trade associations and running a workshop for payday lenders to help prevent complaints and encourage fairness when problems arise,” the FOS said.
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