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    Insights from FOS quarterly data

    22/01/2025

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    The Financial Ombudsman Service (FOS) has reported a significant increase in complaints during the second quarter of the 2024/25 financial year, with a notable focus on credit-related products.

    Surge in Credit Card Complaints

    Between July and September 2024, the FOS received 22,366 new complaints concerning credit cards, marking an all-time quarterly high for this product category. This represents a substantial rise from the 4,505 complaints recorded during the same period in the previous year. The majority of these grievances pertain to perceived irresponsible and unaffordable lending practices. Consumers have expressed concerns that financial providers failed to intervene in situations involving persistently high credit balances, elevated credit limits, or the provision of lower interest rates.

    Increase in Fraud and Scam Cases

    The quarter also saw a significant rise in fraud and scam-related complaints, reaching 9,091 cases—the highest quarterly level to date. This is a notable increase from the 6,264 complaints reported in the same period last year. Of these, 4,956 were related to authorised push payment (APP) scams, highlighting the growing concern over financial fraud affecting consumers.

    Current Account Complaints on the Rise

    Complaints about current accounts have also reached an all-time quarterly high, with 9,186 new cases reported between July and September 2024. This is an increase from the 7,880 complaints received during the same period in the previous year, indicating broader issues within the banking sector that may be contributing to consumer dissatisfaction.

    Implications for Credit Firms

    The surge in complaints, particularly those related to credit cards, underscores the need for credit firms to continue to assess their lending practices and customer engagement strategies. The significant increase in grievances concerning irresponsible lending suggests that consumers are becoming more vigilant about their financial products and services and are more likely to challenge practices they perceive as unfair or detrimental.

    Credit firms should consider implementing more robust affordability checks and proactive measures to assist customers exhibiting signs of financial distress. By addressing these issues, firms can not only reduce the number of complaints escalated to the FOS but also enhance customer satisfaction and trust.

    The latest data from the FOS highlights a pressing need for credit firms to evaluate and improve their lending practices. By taking proactive steps to address consumer concerns, these firms can contribute to a more transparent and fair financial environment, ultimately benefiting both consumers and the industry at large.

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