The first six months of 2016 have not been good for U.K. payday lenders’ relationships with their client base — complaints have gone up markedly since the beginning of the year.
Britain’s financial ombudsman confirmed these figures earlier today (Sept. 6). The Financial Ombudsman Service (FOS) is the agency that intervenes in consumer disputes with banks or insurers. According to its most recent report, the agency took on 169,132 new cases across the financial services sector in the first half of 2016, up 3 percent on the previous six months.
The leading complaint area was payment protection insurance (PPI), which accounted for 54 percent of new complaints with 91,381 new cases. That actually marks an improvement from the 92,667 logged during the prior six-month period. Complaints about products other than PPI rose by 8 percent to 77,751.
Complaints about payday loans, on the other hand, more than tripled to 4,186, from 1,213 in the previous six months. That figure emerges following a regulatory switch in the U.K. that moved to cap interest charged by payday lenders.
On average, 48 percent of complaints were found in consumers’ favor, down from 57 percent in the second half of 2015.
Chief Ombudsman Caroline Wayman noted that complaints are broadly leveling off after hitting their peak a few years back. However, even leveled off, there are over 3,000 a week to sort through.
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