Credit card complaints increase

Complaints related to current accounts and credit cards increased in the second half of 2023, according to latest data from the Financial Conduct Authority (FCA).

In 2023 H2 the total amount of redress was £259 million. This is 10% higher than 2023 H1 (£236 million). The average payout rose to £203, up from £183 in the first six months of the year. Complaints about credit cards increased by 7.5% from 201,925 in 2023 H1 to 217,032 in 2023 H2.

The regulator recorded 874,568 complaints about banking and credit cards during the period, with this up 3.2% on H1 2023. There was also a 1% increase in complaints about current accounts, with 515,336 grievances recorded in H2. Credit card complaints jumped 7.5%, hitting 217,032 in the second half of 2023, while insurance complaints increased by 1% to 281,082.

Overall, financial services firms received a combined 1.87 million complaints in the second half of 2023, which was a 1% decrease compared to the first half of the year. The proportion of upheld complaints saw a drop from 61% in the first half of 2023 to 58% in H2.

Tom Cuppello, Associate Partner at Vestigo Partners, said “While total complaints for financial services products saw a decrease through H2 2023, it is concerning to see a spike in the number of complaints made about credit cards.

“It has been a volatile period for consumer lending following the surge in borrowing costs which may well be driving this trend. Lenders need to be transparent with the terms and conditions of their products, especially regarding interest rates and how payments are calculated.

“The FCA’s own probe into the credit market proposed remedies to help lenders improve customer outcomes and reduce complaints by increasing governance, deepening the focus on the consumer and establishing new data requirements.

“This complaints data and the advent of Consumer Duty are another reminder for lenders that they must begin considering what processes need to change and what investment is required to avoid regulatory consequences.”

Alastair Douglas, CEO of TotallyMoney said “At a time when it should be trying its hardest to support struggling customers, the financial services industry continues to let down the people it’s supposed to be serving.

“Covid and the cost of living crisis have hammered people’s financial resilience, and they’ll be feeling the impact for years to come. Yet we continue to see insurance firms charging hard-up customers almost 40% interest just to pay monthly, while banks provide pitiful rates on savings and hike charges for borrowers.

“We need to see improvements in how firms are treating customers — and fast. 1.87 million complaints over a six month period is simply unacceptable. Transparency must be improved, clearly telling customers how financial products work and how their data is being used. Only then people make informed decisions and take control of their financial future.”