PPI complaints down, but payday loan gripes soar, says Ombudsman

The independent complaints arbitrator, which takes on gripes when a customer has had no joy from the company involved, says it received 1.8 million inquiries and resolved 448,387 cases involving financial firms and their customers in 2014/15.

The arbitration service says 55% of cases were resolved in the consumers' favour, covering an array of financial products from annuities to warranties with PPI accounting for two-thirds of all complaints.

It adds that the UK's four largest banking groups – HSBC, Lloyds Banking Group, Royal Bank of Scotland and Barclays – accounted for 58% of all complaints it received.

The ombudsman service, which is also marking its 15th anniversary today, says that since 2001 when it first started recording complaints, it has answered 15 million consumer inquiries and taken on 2.8 million disputes.

Chief ombudsman Caroline Wayman says: "The world has moved on and changed significantly since I first joined the Ombudsman as an adjudicator in 2001. Yet our workload over the last 15 years has been constantly dominated by the past – clearing up the fall-out of the mass claims and mis-selling scandals of the last decade and a half.

"But 15 years of sorting out millions of these problems have given us unparalleled experience, knowledge and understanding of why complaints happen – and how they could be avoided in future. That's why our focus continues to be on complaints prevention and sorting things out pragmatically as soon as problems emerge."

PPI complaints falling

The service says the number of PPI disputes fell last year to just under 205,000, from a record high of nearly 400,000 the year before. But it adds that the "continuing heavy volumes of entrenched PPI disputes could still take years to work through" – it receives an average of 4,000 PPI complaints each week.

Of the PPI complaints resolved in 2014/15, 62% were upheld in the consumer's favour, compared to 65% in 2013/14.

However it stresses how easy it is for people to complain directly themselves for PPI rather than having to go via a claims management company. It says many of the complaints submitted on behalf of customers only includes generic information that isn't specific to each individual.

MoneySavingExpert.com has told people they can reclaim PPI themselves for free for years, see our Reclaim PPI for free guide to claim back £1,000s for mis-selling. The PPI bill for the UK's major banks stands at around £24 billion and is expected to rise.

Packaged bank accounts gripes up nearly 300%

For the year ending 31 March 2015, the Financial Ombudsman says it received 21,348 complaints about "packaged" accounts – where you pay a monthly fee for your account in return for benefits, most often bundled insurance policies – a 278% increase from the 5,667 it received in the previous year.

However, it says about 83% of cases come from a claims management company and adds that it's working closely with these firms to educate and improve behaviours because many of the complaints they bring have little prospect of success.

The uphold rate for these complaints has dropped from 77% to 33% over the course of the year. See our Reclaim packaged accounts guide to see if you can get back £100s if you were mis-sold, by claiming yourself.

PPI complaints down, but payday loans gripes soar, says Ombudsman

Payday loan complaints up nearly 50%

In 2015, the Ombudsman received 1,157 complaints about payday loans, compared with the 794 it received a year earlier. It says complaints centred on lenders' use of "continuous payment authorities" where firms attempt to take multiple payments leading to extra charges on a customer's account, sometimes pushing them into further debt. It upheld 64% of payday loans complaints.

However in July 2014, regulator the Financial Conduct Authority (FCA) put in place a limit on how many times lenders can take payments and in January this year a cap was introduced both on late repayment fees and charges and the total cost of short-term loans (see the New payday loan rules come into effect today MSE news story).

The Ombudsman also received 1,213 complaints about credit broking, up from 649 last year and a further 843 complaints were received about debt collecting, up from the 557 recorded in the previous year.

If you're struggling with debt, see our Debt problems guide for what to do and where to get help guide and Payday loan best buys? to check cheaper alternatives first.

Additional reporting by the Press Association.