Title: “Credit Card Complaints Surge to Record High: Concerns Over Lending Practices”
Subtitle: “Financial Ombudsman Service reports a significant increase in credit card complaints, with focus on unaffordable and irresponsible lending.”
Complaints about credit cards reached a record high in the final three months of last year, according to the Financial Ombudsman Service (FOS).
Consumers lodged 5,660 gripes about their credit cards between October 1, 2023, and December 31, 2023 – the highest level the service has seen for a three-month-period. Its comparable data goes back to the first quarter of the financial year 2014/15.
The organisation, which acts as a free resolution service for consumers and their financial providers, said 3,086 of those complaints were due to perceived unaffordable or irresponsible lending by financial firms.
Concerns Over Lending Practices:
Nearly three-quarters of the credit card and unaffordable lending complaints highlighted in the new figures were brought by professional representatives, such as claims management companies and law firms, up from a quarter of these complaints a year earlier.
Abby Thomas, chief executive and chief ombudsman of the FOS, said: “Given that many people are struggling in the current economic environment, it’s concerning to see such a significant rise in credit card complaints.”
Professional Representatives and Complaints:
In total, across a variety of financial products, the ombudsman received nearly 7,500 complaints about perceived irresponsible and unaffordable lending in the latest period, of which 70% were from professional representatives. The uphold rate for those complaints brought by professional representatives which the ombudsman resolved during the period was 14% compared with 44% for consumers who brought complaints directly to the service.
Top Five Most Complained-About Products:
- Current Accounts: Fraud and scams remain the main driver of current account complaints.
- Credit Cards: Second-most complained about product, raising concerns about lending practices.
- Hire Purchase (Motor): Motor finance commission complaints contribute significantly.
- Car/Motorcycle Insurance: Attracts a substantial number of complaints, reaching fourth place.
- Buildings Insurance: Complaints in this category garnered 1,666 grievances.
