Increasing complaints point to declining standards in financial services sector
Each year, the Financial Ombudsman Service, which is a free service that settles complaints between customers and companies that provide financial services, releases figures on how many complaints it has received.
This pulse check on how well the sector is performing is always illuminating, but the most recent set of stats, released over the past week, are particularly so - and underline the extent to which some financial firms are letting down their customers.
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Hide AdComplaints about products many of us rely on every day have ballooned.


For example, credit card complaints went up from just over 14,500 in the financial year 2022/23 to 24,402 in 2023/24.
Customer complaints about current accounts, already high the previous year at just over 26,000, surpassed 30,600 in the past year.
When it came to financing for the hire purchase of motor vehicles, complaints increased from 11,446 the year before to 21,441 in the past year.
The situation isn’t better in insurance.
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Hide AdComplaints about car and motorcycle insurance increased from 11,851 the year before to over 16,300 in the past year.
This week, the Ombudsman reported that the number of travel insurance complaints has reached its highest level since the disruption to holidays caused by the pandemic, increasing by nearly 20 per cent in the past year.
Consumers who book cover for their well-earned summer holidays do so in the belief that they’ll be properly protected should something untoward happen, not arguing with their insurer when they make a claim.
Another driver of the increase in complaints to the FOS is due to fraud and scams.
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Hide AdThese types of complaints have risen by a fifth over the last year, with 27,312 cases in the last financial year.
Just over half of these cases were authorised push payment (APP) scams, where victims are tricked into transferring money to a fraudster’s account.
Given the relentlessness of fraud in this country, and the obvious continued harm to consumers, it remains unconscionable that certain sections of industry wish to delay the introduction of a mandatory reimbursement scheme which would see victims of fraud treated more consistently and fairly than they have hitherto been.
Some point to the unreadiness of smaller firms to implement the systems required, but the reality is the scheme has already been delayed since April.
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Hide AdA further delay would mean more victims struggling to get their money back.
New ministers and the regulator in charge of introducing a new mandatory scheme of reimbursement should give these arguments short shrift.
It is always incumbent on financial services firms to ensure their customers are receiving value for money, but after the worst cost of living crisis in decades, it’s even more so.
Financial firms are subject to the Financial Conduct Authority’s Consumer Duty, a set of requirements aimed at delivering a better customer experience aimed at preventing harm (and therefore the need for customers to take complaints to the Financial Ombudsman Service) from arising.
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Hide AdNearly a year into its introduction and the evidence of how well it’s going is far from convincing: there were around 20,000 more complaints made to the Financial Ombudsman Service this year than last.
If the Consumer Duty is to achieve its objective, the regulator should get tough with firms consistently falling below the required standards, sending a message that poor customer experiences and outcomes will not be tolerated.
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