Complaints about payday lenders more than tripled in the first half of the year, new official figures have revealed. The short-term, high-interest loans attracted 4,186 grievances, up from 1,213 in the previous six months.
The Consumer Finance Association, which represents payday lenders, claimed most customers were more satisfied with payday providers than by more traditional lenders.
Russell Hamblin-Boone, chief executive of the association, 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 per cent of all credit customers.”
The Financial Conduct Authority capped the interest charged by payday lenders in January 2015 in an attempt to end spiralling consumer debt.
The Financial Ombudsman Service (FOS), which intervenes when a consumer is not satisfied with how a bank or insurer has handled a complaint said payment protection insurance still accounted for more than half of all grievances lodged against British banks and financial services firms in the first half of the year, however.
In total, financial businesses received 169,132 complaints, up 3 per cent on the last six months of 2015.
Bank of Scotland received the highest number of PPI grievances at 17,358, followed closely by Lloyds at 16,626 complaints.
Chief ombudsman Caroline Wayman said: “Although it’s 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. And we’re continuing to deal with the issues and uncertainties around PPI which remain a significant challenge for everyone involved.”
Lloyds received the most complaints overall, with 22,241. Antonio Horta-Osorio, The lender’s chief executive, faced fresh scrutiny in August over expenses incurred during a trip to Singapore, but Lloyds later said he did not break company policy.
The figures emerged after the bank faced scrutiny over chief executive Antonio Horta-Osorio’s business expenses. In July the firm announced plans to cut 3,000 jobs and close 200 branches to cut costs.
Bank of Scotland received the second highest number of complaints, followed by Barclays, HSBC and NatWest.
Ms Wayman said: “Lots of factors can influence the complaints we see, from more people knowing about their rights when things go wrong to external factors like volatility in the stock market or extreme weather conditions. That’s why I believe it's important that we continue to share our insights into complaints to help businesses to avoid the mistakes of the past.”
The Financial Conduct Authority has proposed a June 2019 deadline for submitting PPI mis-selling claims, which have so far cost banks £24bn.
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