A “STRIKING” surge in consumer complaints about credit — including payday loans — has been seen by the Financial Ombudsman Service (FOS) over the last year.
In its annual review of complaints, the FOS said complaints about payday loans tripled in 2016-17 compared with the previous year, receiving around 10,529 in comparison to 3216 in 2015-16.
More than half (59 per cent) of payday loan complaints were upheld by the ombudsman service in consumers’ favour in 2016-17.
Caroline Wayman, FOS chief executive and chief ombudsman, said: “Whilst payment protection insurance (PPI) continues to make up a large proportion of the complaints we see, the most striking story this year has been the rise in complaints we’ve seen from people having trouble with credit.
“We’ve seen around three times last year’s volumes of complaints about payday loans.”
Overall, there were 25,984 complaints about consumer credit products and services in 2016-17, compared with 13,713 in the previous year.
Within the total, complaints about hire purchase were also up year-on-year with 5029 complaints in 2016-17, rising from 3072.
Complaints about catalogue shopping, debt collecting, hiring, leasing and renting, point-of-sale loans, credit reference agencies, guarantor loans, and logbook loans — where the borrower’s vehicle is put up as security — also increased year-on-year.
A huge clampdown on payday lenders has taken place in recent years, with firms now having limits on the amount of times they can roll a loan over and the amount of interest they can charge, to stop borrowers sinking into a debt spiral.
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