Recent data released by the Financial Ombudsman Service (FOS) has revealed a staggering surge in credit card complaints, hitting an all-time high in Quarter 4 of 2023. A total of 5,660 complaints were lodged by consumers during this period, with a significant portion—3,086—attributed to concerns regarding unaffordable or irresponsible lending practices. This spike represents the highest level of complaints recorded in a three-month span since 2014/15.

Comparatively, the same period in 2022/23 saw 3,216 credit card complaints, of which a mere 665 pertained to irresponsible or unaffordable lending. This exponential increase underscores a growing dissatisfaction among consumers with the services provided by financial institutions, particularly regarding high credit balances, excessive credit limits, and steep interest rates.

Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, expressed concern over the escalation of credit card complaints, emphasizing the need for fair and transparent treatment of consumers, especially those grappling with significant debt burdens.

In addition to credit card grievances, FOS received almost 7,500 complaints across various financial products concerning perceived irresponsible and unaffordable lending. Notably, 70% of these complaints originated from professional representatives, with a lower uphold rate compared to complaints brought directly by consumers.

Viv Kelly, Ombudsman Director for Consumer Credit at FOS, underscored the accessibility of their free, independent service for consumers, highlighting that direct complaints often yield higher uphold rates compared to those facilitated by professional representatives.

Beyond credit cards, current accounts remain the most complained-about financial product, with a notable increase driven by concerns related to fraud and scams. Similarly, hire purchase (motor), car/motorcycle insurance, and buildings insurance witnessed substantial upticks in complaints, indicating a broader trend of dissatisfaction across the financial services sector.

As consumers navigate the complexities of financial products and services, FOS continues to play a pivotal role in addressing grievances and ensuring accountability within the industry. Despite challenges posed by rising complaints, FOS upholds its commitment to resolving disputes and safeguarding consumer interests, with an average uphold rate of 35% across all financial products—an indicator of its unwavering dedication to fairness and justice.

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Last Update: March 4, 2024