Credit, Collections & Insolvency News
The Financial Ombudsman Service (FOS) has reported a record 18,658 new complaints regarding car loans in the last quarter of 2024, surpassing credit cards as the most complained-about financial product.
Motor hire purchase deal complaints jumped almost three times to 15,956 cases, followed by disputes about credit cards, current accounts, car/motorcycle insurance and motor conditional sales.
The service said it continued to see high levels of car finance cases from consumers who were not told the car dealer would get commission from the finance provider for arranging the finance.
Overall customer complaints about financial firms jumped 40% to over 68,430 cases in the final quarter of last year (October and December) which was a slight drop from 73,692 complaints reported in the previous quarter. Complaints about home loans were further down the list.
First charge mortgage disputes came in at 1,271 cases in the period, while buy-to-let disagreements registered 199 cases.
Professional representatives are continuing to bring high levels of complaints to FOS, particularly in relation to hire purchase (motor), credit cards and current accounts.
From April to December 2024, professional representatives accounted for around 47% of the complaints received, compared to just 21% in the first nine months of 2023/24.
Earlier this month, FOS announced a proposal to charge professional representatives £250 to refer a case to FOS from 1st April 2025. They will receive £175 back in credit if the complaint is found in favour of the consumer they represent, reducing the charge they pay to £75.
Professional representatives will be able to bring ten cases to the service for free each financial year. After that, every subsequent case they refer will be chargeable. The service will remain free to families and friends, charities and voluntary organisations who may be helping people with their complaint.
James Dipple-Johnstone, Interim Chief Ombudsman of the Financial Ombudsman Service, said “Every year we help resolve tens of thousands of difficult disputes for consumers and businesses – providing impartial help in often challenging circumstances.
“We are continuing to see high volumes of motor finance commission cases and would encourage businesses to consider whether complaints are covered by the FCA’s temporary complaint handling rules.
“Ongoing legal proceedings are impacting our ability to issue final decisions in these cases, but we are putting steps in place to ensure we can resolve them as quickly as possible when we have the clarity we need.”
Most complained about between October and December 2024.
| Q3 2024/25 | Q2 2024/25 | Q3 2023/24 | |
|---|---|---|---|
| Hire purchase (motor) | 15,956 | 11,817 | 5,419 |
| Credit cards | 10,957 | 22,366 | 5,660 |
| Current accounts | 8,830 | 9,186 | 7,804 |
| Car/motorcycle insurance | 3,660 | 3,386 | 4,123 |
| Conditional sale (motor) | 2,702 | 2,171 | 1,260 |
Top three most complained about products brought to FOS by professional representatives. The data is for new complaints – the numbers are rounded to the nearest hundred.
| Q3 2024/25 | Q2 2024/25 | Q3 2023/24 | |
|---|---|---|---|
| Hire purchase (motor) | 12,500 | 8,200 | 3,500 |
| Credit cards | 7,400 | 19,000 | 2,300 |
| Current accounts | 2,500 | 3,100 | 2,000 |
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