The Financial Ombudsman (FOS) has published it’s latest complaints data for the second quarter of the financial year 2016/17. The complaints data shows a rise in issues with payday loans. Between, April and September 2016, the Ombudsman received over 5,000 payday loan complaints, compared to 3,200 between April 2015 and March 2016. There has also been a rise in hire purchase complaints made to the Ombudsman this quarter. The number of people seeking Citizens Advice’s help for rent to own debts has gone up from 1,612 between April and June 2015 to 1,858 for the same quarter this year.
Citizens Advice Chief Executive, Gillian Guy, said “People are still falling foul of payday loan firms that don’t do the necessary checks. The number of payday loan problems we’ve helped people with has halved since the FCA introduced a price cap on payday loan interest rates and fees in 2015. But our evidence shows some firms are still failing to carry out basic checks to make sure people can afford to pay back what they borrow.
“To build on its improvement of the payday loan sector, the FCA should consider making its responsible lending guidance rules that lenders have to follow. This would mean lenders would be required to check whether borrowers can afford a loan. The FCA also needs to make sure people aren’t getting into difficulty because of other forms of high cost credit. We have helped more people with rent to own debts than last year, with many reporting problems with meeting repayments. Extending the payday loan price cap to the rent to own market could protect consumers from the high cost of these agreements and stop people falling into worsening debt.”
The figures show the number of enquiries and new complaints we’ve received, broken down by financial product, along with the number of complaints passed to an ombudsman for final decision, and the uphold rate where we found in favour of the consumer. You can find the full report here.