British consumers have more complaints about the banking sector across the board than they did a year ago.
Complaints about the sector reached their highest level in at least a decade, with all the most complained about products seeing year-over-year increases in cases, the United Kingdom’s Financial Ombudsman Service said in a Friday (July 12) press release.
In total, the number of complaints leaped from 61,995 in financial year 2022-23 to 80,137 in financial year 2023-24, according to the release.
“It’s always concerning when you see cases rise so significantly, particularly when so many people are struggling in the current economic climate,” Abby Thomas, CEO and chief ombudsman of the Financial Ombudsman Service, said in the release.
Three categories driving the increase in complaints include current accounts, credit cards, and frauds and scams, according to the release.
Consumers’ complaints in these categories centered on concerns about administration and customer service, perceived unaffordable or irresponsible lending, and worries that they may have fallen victim to fraud or scams, per the release.
Frauds and scams accounted for more complaints than ever before, the release said. About half of these cases involved authorized push payment (APP) scams in which consumers were tricked into sending money only to fraudsters.
APP fraud is on the rise throughout geographies where real-time and instant payment rails are increasingly prevalent, including the U.K., the European Union and the United States, PYMNTS reported in March.
The Financial Ombudsman Service also noted that an increasing percentage of complaints is being brought by claims management companies and professional representatives, rather than by consumers themselves, the release said.
These organizations accounted for 25% of the cases brought in the most recent financial year, up from 18% in the prior financial year, per the release.
“While they have an important role to play in resolving financial disputes, they can also gain financially from our service without contributing to the running costs,” James Dipple-Johnstone, deputy chief ombudsman of the Financial Ombudsman Service, said in the release. “There is sometimes little evidence of due diligence by some representatives to ensure claims they advance have merit.”
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