UK Financial Complaints Surge by 40% as Banking and Credit Issues Dominate

• UK financial complaints increased by more than 40% in the first half of 2024, with the Financial Ombudsman Service receiving 133,019 complaints, most of which were about banking and credit.

• Banking and credit complaints were 101,031, primarily owing to credit card disputes, unaffordable loans, and fraud, with more than half lodged by professional representatives.

• New measures, such as a Payment Systems Regulator rule to reimburse fraud victims, show the UK’s efforts to counteract an increase in fraud complaints.

The first half of 2024 witnessed a dramatic increase in UK consumer financial complaints, with the Financial Ombudsman Service (FOS) receiving almost 40% more grievances than last year. Between January 1 and June 30, 2024, the service received 133,019 complaints, a significant rise from 93,114 in the first half of 2023. This increase reflects increased unhappiness among UK customers with their financial service providers, particularly in the banking and credit sectors.

Banking and Credit: The Most Complained-About Sector

The banking and credit industry remains the most concerning, with the only year-on-year increase in complaints. In 2024, this sector received 101,031 complaints in the first six months, compared to 56,690 in the same period in 2023. Banking and credit issues included credit card disputes, unaffordable lending, vehicle financing issues, and increasing fraud and scam cases.

The banking and credit industry remains the most concerning, with the only year-on-year increase in complaints. In 2024, this sector received 101,031 complaints in the first six months, compared to 56,690 in the same period in 2023. Banking and credit issues included credit card disputes, unaffordable lending, vehicle financing issues, and increasing fraud and scam cases.

Rising Fraud Concerns Prompt Regulatory Action

As fraud and scam accusations increase, UK authorities have implemented stricter consumer protection measures. The Payment Systems Regulator has issued new regulations requiring banks to reimburse Authorised Push Payment (APP) fraud victims for losses of up to £85,000. This initiative intends to alleviate some of the financial difficulties imposed on individuals affected by scams and to encourage financial institutions to improve their anti-fraud efforts.

Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service emphasised the significance of firms putting consumers first. “Businesses should put consumers at the heart of their service, but the high level of complaints we receive shows that’s not always the case,” Thomas told me. She emphasised the importance of honesty, fairness, and understanding in the way organisations connect with their customers.

Mixed Success in Complaint Resolution

According to the Ombudsman’s most recent report, 35% of complaints were upheld in favour of consumers in the first half of 2024, a modest reduction from 37% during the same period in 2023. The research also revealed which companies in various areas, including banking, insurance, investments, and credit, received the most customer complaints. The data indicates that certain organisations have higher uphold rates, implying that many complaints may be justified and that other businesses continue to fail to satisfy consumer expectations efficiently.

Professional Representatives Play a Growing Role in Complaints

The considerable increase in professionally filed complaints may indicate a greater dependence on professional advocates to ensure cases are properly documented and supported. The Ombudsman emphasised that, while professional representatives play an important role, their cases must be well-documented to support the claims made on behalf of consumers. Abby Thomas urged consumers to seek help directly from the Financial Ombudsman Service if they feel mistreated, emphasising the free and simple process available to all.

Addressing Scams through Data-Sharing Initiatives

To combat escalating fraud, Meta has partnered with UK banks such as NatWest and Metro Bank on a data-sharing effort. This agreement allows banks to exchange intelligence with Meta to combat social media fraud, making it easier to identify and prevent potential fraud before it occurs.

The higher volume of complaints and regulatory responses demonstrates the UK’s growing emphasis on consumer rights in the financial sector. With banking and credit complaints at an all-time high, these challenges highlight the need for greater transparency, fair treatment, and improved customer service from financial institutions throughout the UK.