Consumer outrage as payday loan complaints more than triple in six months

The Financial Ombudsman Service (FOS), which intervenes when a consumer is not satisfied with how a bank or insurer has handled a complaint, said it took on 169,132 new cases across the financial services sector in the first half of 2016, up 3 per cent on the previous six months.

Payment protection insurance (PPI), the focus of Britain’s costliest mis-selling scandal, accounted for 54 percent of new complaints with 91,381 new cases, down from 92,667.

Complaints about products other than PPI rose by eight per cent to 77,751.

Britain’s Financial Conduct Authority surprised banks last month by setting a June 2019 deadline for consumers to make a complaint about PPI, a year later than expected. Banks have paid £24bn in PPI compensation to customers over the past five years on policies that in some cases would never pay out.

Complaints about payday loans, which provide short-term credit typically at high interest rates, more than tripled to 4,186, from 1,213 in the previous six months.

Chief ombudsman Caroline Wayman said that complaints are broadly levelling off, adding that PPI complaints peaked several years ago but are still running at more than 3,000 a week and remain a significant challenge.

“Lots of factors can influence the complaints we see, from more people knowing about their rights when things go wrong to external factors like volatility in the stock market or extreme weather conditions,” Ms Wayman said.