Motor finance commissions lead to record complaint figures

Complaints to the Financial Ombudsman Service (FOS) have surged, with 305,726 recorded in the year to 31st March 2025. This is the highest total since the 388,392 seen in the year to March 2019, when the PPI scandal drove a spike in complaints.

The latest increase comes amid the motor finance scandal, with the Supreme Court set to determine if banks unlawfully paid commissions to car dealers without customer consent later this year. Data shows that 73,328 complaints relating to motor finance were logged in the year. This marked a near-500% increase on the 12,604 recorded the year before.

Complaints over irresponsible and unaffordable lending hit 71,685 in the period, with this up from 33,221 a year earlier. The report shows that 34% of complaints were upheld in the consumer’s favour, compared to 37% the year before, while the ombudsman’s caseload increased by more than 50%, year-on-year.

The 2024/25 caseload is a 54% increase when compared to the 198,798 complaints received from consumers in the previous year.

Around half of these complaints were brought by professional representatives. That’s compared to the 25% brought by professional representatives during the 2023/24 financial year. This growth has mainly been focused on credit affordability and car finance complaints.

Some of these individual complaint categories have risen significantly across all sectors when compared to the previous year. In 2024/25, FOS upheld 34% of complaints in the consumers’ favour, compared to 37% in 2023/24. Around 27% of complaints brought by professional representatives were upheld. Around 37% of cases brought directly by consumers were upheld.

James Dipple-Johnstone, Interim Chief Ombudsman, said “Financial services have evolved significantly since we were set up 25 years ago. New financial products, the digitalisation of services and an increase in fraud and scams mean that we now see high levels of demand and an increasing number of complex cases.

That is why we are working closely with HMT Treasury and the FCA to ensure the system – including the vital role our service plays within it – is fit for the future.”

Jenny Simmonds, Interim Chief Executive at FOS, said “Although we resolved thousands of cases last year, we know there’s more to do which is why we are driving forward ambitious plans to transform our service.

“We are modernising our ways of working, investing in new tools and technologies, and building flexibility into our workforce.
This modernisation programme, alongside reform to the wider dispute resolution system, will create a trusted and effective financial ombudsman, which in turn enables predictability and the confidence to support a strong economy.”

A breakdown of the most complained-about products

	2024/25	Reported in 2023/24
Hire purchase (motor)	76,160	21,441
Credit cards	60,364	24,402
Current accounts	36,221	30,635
Car or motorcycle insurance	14,082	16,322
Conditional sale (motor)	11,521	7,829

 

	2024/25	2023/24
Motor finance commission	73,328	12,604
Irresponsible/unaffordable lending	71,685	33,221
Fraud and scams	35,416	27,675