More and more people are taking up arms against their bank or insurer – with scams, high premiums and low payouts driving a 16 per cent rise in complaints.
Figures from the Financial Ombudsman Service (FOS) today show customer complaints against financial firms rose from 79,921 to 93,114 from the last six months of last year to the first six of this one.
There were 56,690 new complaints against banks and credit card firms in in the first six months of 2023, a rise of 12 per cent, of which half were about poor treatment after being scammed.
Insurance complaints rose 26 per cent, from 19,346 to 24,496, with most of the the complaints due to slow payouts on building and motor insurance claims.
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Other insurance gripes include delays to the cost of repairing homes and cars and disputes about premium prices, for example where consumers are quoted a higher price and are unable to switch.
The average driver now pays £511 a year for car insurance, a record high according to figures from the Association of British Insurers trade body.
The ABI said the average premium paid by motorists renewing their cover rose by £36 to £471, while the average premium for a new policy was up £21 to £566.
Last year the Financial Conduct Authority regulator warned insurers not to undervalue cars, and said it was watching the problem closely.
The Ombudsman has also noted more complaints about valuations – the price insurers pay to the owners of damaged or wrecked vehicles.
Meanwhile FOS mortgage and home finance complaints were up by 20 per cent, from 4,160 to 5,002.
Abby Thomas, FOS chief executive, said: ‘Financial complaints have risen again, with cases particularly increasing in the banking and insurance sectors.
‘Given the economic challenges people are facing, it’s more important than ever that they feel protected.
‘Whatever their grievance, consumers should expect fair and reasonable treatment from their provider.
‘If consumers don’t feel that’s the case, they can ask our free, independent service to investigate their complaint.’
The FOS also upheld more complaints in consumers’ favour, suggesting the increase in complaints is justified.
In the first six months of this year the FOS upheld 37 per cent of complaints in the consumers’ favour, compared to 34 per cent in the second half of 2022.
Fraud and scam complaints
The FOS said most of the complaints it gets on scams fall into four categories:
Authorised push payment (APP) scams
This is where a consumer believes they are transferring cash to a real person or firm, only to be taken in by a fraudster.
When this happens, consumers fall down the cracks of bank fraud refund rules. Only half of APP frauds are refunded by banks – except TSB, which has a policy of refunding all genuine APP scams.
Credit or debit card fraud
These are where a customer is tricked into making a payment using a credit or debit card, often to an investment that does not exist with some taken in by cryptocurrency scams.
Bank detail fraud
These scams see consumers conned into handing over their bank details and allowing criminals to steal cash from them.
Disputed transactions
This sort of fraud is where a customer sees payments from their bank account or card that they did not authorise.
Insurance complaints
As well as complaints about the value of payouts, or delays, the FOS said it frequently sees gripes such as:
- The insurer wrongly claiming to have fixed a car or home
- An insurer saying it can repair a damaged item consumers actually want replaced
- Insurance firms deciding the value or a home or building is not fully covered by insurance
- Insurers cancelling policies and claiming a customer miseld them about the true cost of a claim
- Customers being offered inferior versions of items they have needed to claim for
When to complain to the FOS
The first thing you should do is contact the bank or financial firm you have the issue with.
If they do not respond, or you are not happy with the response, you can then complain to them.
If they do not send a response within 15 days, or they do but you think it is unfair, you can then turn to the FOS.
