British Consumers Report Record High Complaints Against Banking Sector

British consumers are voicing more complaints about the banking sector than ever before, according to the United Kingdom’s Financial Ombudsman Service. In a press release on Friday, the service revealed that complaints about the sector have reached their highest level in at least a decade.

The number of complaints soared from 61,995 in the financial year 2022-23 to 80,137 in the financial year 2023-24, marking a significant increase. Abby Thomas, CEO and chief ombudsman of the Financial Ombudsman Service, expressed concern over the rise in cases, especially during a challenging economic climate.

Three main categories are driving the surge in complaints: current accounts, credit cards, and frauds and scams. Consumers have raised issues regarding administration and customer service, perceived irresponsible lending practices, and fears of falling victim to fraud or scams.

Of particular concern is the increase in frauds and scams, with a record number of cases reported. A significant portion of these cases involved authorized push payment (APP) scams, where consumers were deceived into sending money to fraudsters.

The Financial Ombudsman Service also highlighted a concerning trend where a growing percentage of complaints are being brought by claims management companies and professional representatives, rather than by consumers themselves. These organizations accounted for 25% of cases in the most recent financial year, up from 18% in the previous year.

James Dipple-Johnstone, deputy chief ombudsman of the Financial Ombudsman Service, raised concerns about the lack of due diligence by some representatives in ensuring the validity of the claims they advance. While these organizations play a crucial role in resolving financial disputes, there are instances where they stand to gain financially without contributing to the service’s running costs.

The rise in complaints within the banking sector underscores the need for improved consumer protection measures and greater transparency in financial services. As cases continue to escalate, it is essential for banks and financial institutions to address these concerns and prioritize the well-being of their customers.