Payday loan complaints triple but PPI still dominates - Financial Ombudsman

The total marked a tripling of such complaints when compared with the previous six months.

However, that number was still vastly overshadowed by those still being made about payment protection insurance (PPI).

PPI enquiries totalled 91,381 in the six months to June, accounting for 54 per cent of all new cases considered by the ombudsman during the period.

The Financial Ombudsman said the rise in complaints reflected a growing awareness among borrowers of their rights.

There were a total of 169,132 new cases on the books of the ombudsman in the first half of the year relating to a range of consumer complaints about banks, insurers and other financial businesses.

This was a 3 per cent rise on the previous six months.

The ombudsman only deals with disputes that cannot be resolved between a consumer and a financial institution, so only reflects a fraction of the total number of unhappy customers.

It found in consumers’ favour in just under half (48 per cent) of cases completed in the first half of the year.

The figures show that payday lending was one area in which complaints had risen in the first half of the year, up from 1,213 in the previous six months. Some 53 per cent of payday complaints were upheld.

However, the payday industry said that figure represented a falling proportion of upheld complaints.

The Consumer Finance Association, which represents some of the major payday providers, claimed most customers felt they were treated better by payday operators than by other types of lenders.

The association’s chief executive, Russell Hamblin-Boone, said: “We are obviously disappointed with the number of complaints, but this must be viewed in perspective. Of around a million loans funded there were about 2,000 upheld complaints.

“The true picture is represented by a recent customer satisfaction survey by Smart Money People, which showed that 95 per cent of short-term credit customers felt they were treated fairly against an average of 88% of all credit customers.”

PPI complaints - made by those who felt they had been mis-sold the loan insurance - fell slightly compared to the second half of 2015, continuing a trend.

Chief financial ombudsman Caroline Wayman, said: “Although it is a few years now since PPI complaints peaked, we have been receiving over 3,000 a week for six years running - despite wider expectations that numbers will fall,” she said. “We are continuing to deal with the issues and uncertainties around PPI which remain a significant challenge for everyone involved.”