With complaints to the Financial Ombudsman Service (FOS) up by almost 20%, we reveal which products are really getting our goat and explain your rights if you're not happy.
If you have an issue with a financial product, from mortgages to ISAs, and the provider isn’t playing ball, you can take your complaint to the FOS, an independent arbitrator.
Should the Ombudsman uphold your complaint, it can force your provider to put things right and even pay you compensation.
And it seems like more and more of us are turning to the FOS for support with our financial disputes.
Complaints rise by almost 20%
According to the Ombudsman's data for the second half of 2023, there was an almost 20% jump in complaints during this period compared with the previous year.
Shockingly, the FOS received 95,349 complaints in the six months to December 2023, which is up from 79,921 in the second half of 2022.
In addition to an increase in the number of complaints, there was also a rise in the number of companies featuring on the Ombudsman’s naughty list.
During this period, the FOS received complaints relating to 236 companies, which is up from 212 in the previous year.
So, what are we complaining about?
Current account scams
As the source of more than 40% of all complaints, current accounts and credit cards were easily the worst offenders in the FOS’s data.
In total, these two products generated a staggering 62,139 new complaints, which increased from 50,346 the previous year.
According to the FOS, the majority of current account grievances fall into the category of fraudulent activity.
Typically, customers will take their case to the FOS if a bank refuses to refund any money lost to scams.
Some of the most common scams include unauthorised card transactions and cases in which the victim is tricked into handing over their bank details.
And the trouble is that the growing sophistication of technology such as AI is making these scams more difficult to detect than ever.
What does the regulation say?
Under UK legislation, a bank will need to refund a customer’s money if they haven’t authorised a payment.
However, things start to get tricky if a customer has authorised a payment through "gross negligence" or they were aware the money was leaving their account.
In these cases, the bank typically isn’t liable for the loss, although the FOS will look at any extenuating circumstances.
This may include cases where a bank should not have taken a customer’s authorisation “at face value” and investigated further before allowing the funds to leave the account.
Irresponsible credit card lending
When it comes to credit cards, many of the complaints received by the FOS relate to what it deems “unaffordable and irresponsible” lending.
With these grievances, a customer may argue that the lender should never have offered them funds in the first place if they had no realistic means of repaying the debt.
As well as credit cards, the FOS also receives complaints relating to irresponsible lending on products such as car finance and payday loans.
Under the new Consumer Duty rules brought in during 2023, the Ombudsman is likely to take an especially unfavourable view of any shady lending practices that could potentially impact vulnerable customers.
The complete guide to credit cards
Delays on insurance claims
Outside of banking, insurers also featured prominently in the FOS data, with complaints rising to 22,845 from 19,346 the previous year.
Within these numbers, complaints about motorbike or car insurance experienced the sharpest rise.
According to the data, most cases related to delays in resolving complaints or to vehicle valuations.
You can read more about disputes over vehicle valuations in our article Have you fallen victim to this big car insurance scandal?
Don’t just take it
Although the Ombudsman upheld just 36% of complaints during this period, this does represent a slight increase from the previous year when it ruled in the customer’s favour in 34% of cases.
If you’ve been mucked about by a financial firm, don’t just accept it and move on with your life. It’s important that you complain and get them to understand your issue.
If they don’t deal with it to your satisfaction, you can then take it to the FOS. Bear in mind, the company will have eight weeks after it receives your complaint to resolve the matter or to issue you with a ‘deadlock’ letter.
In extreme cases, the FCA has the power to award as much as £430,000 in compensation when it rules in your favour.