BREAKING NEWS

Lenders scolded after rise in British consumer credit complaints

Now Reading:

Lenders scolded after rise in British consumer credit complaints

Text size Aa Aa

By Huw Jones LONDON (Reuters) – Complaints about payday loans, hire purchase and other types of consumer credit in Britain rose in the second quarter, the Financial Ombudsman Service (FOS) said on Tuesday, criticising lenders for inadequate checks on borrowers’ ability to pay. Fast-growing consumer credit has come under intense scrutiny from market regulators concerned about lax lending standards, with the Bank of England warning banks against complacency. The FOS said that consumer credit complaints totalled 7,281 in the three months to June 30, up from 5,846 in the same period last year. “Although not every credit complaint is about trouble with debt, we’ve continued to hear from people who are struggling,” Chief Ombudsman Caroline Wayman said in the dispute-resolution body’s quarterly report on Tuesday. “As preferences change — for example, from payday loans to instalment loans — we’ve seen that lenders still aren’t always making the right call in checking people will be able to repay what they owe.” Payday loans, which provide short-term credit at high interest rates, made up nearly half of consumer credit complaints at 3,126. Hire purchase was next, generating 1,334 complaints, followed by point-of-sale loans on 1,009 and catalogue shopping on 556. The 7,281 total also includes instalment loans, credit reference agencies, store cards and debt collection. The FOS said that consumer credit complaints in the financial year that ended in April leapt by 89 percent, compared with a 40 percent rise in the previous year. The ombudsdman said that payment protection insurance (PPI), responsible for Britain’s costliest financial mis-selling scandal, remains the most complained about part of the market. Consumers have until August 29, 2019, to claim compensation for mis-sold PPI. The FOS opened 42,401 new PPI cases in the quarter, down slightly from 43,569 in the same period last year, with 8 out of 10 complaints made via claims-management companies that take a slice of any compensation. “We’ve always highlighted that it’s easy and free to complain directly,” said Richard Thompson, principal ombudsman at the FOS.

(Reporting by Huw Jones; Editing by David Goodman)
euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.