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Complaints about the banking sector have reached the highest level in at least a decade, according to the Financial Ombudsman Service (FOS).
Consumers raised 80,137 cases with the free resolution service about banking and payment products in the financial year 2023-24, compared with 61,995 in 2022-23.
Concerns about current accounts and credit cards and worries about frauds and scams were behind the increase, the service said.
Themes included admin and customer service as well as perceived unaffordable or irresponsible lending by financial firms.
Current accounts were the most complained-about product, with 30,635 gripes.
Consumers brought 24,402 credit card complaints, of which 13,584 were due to perceptions around unaffordable or irresponsible lending.
In 2022-23, there were 14,504 credit complaints and 3,723 were about this complaint issue.
Fraud and scam cases generated 27,312 complaints in 2023/24, around half being around authorised push payment scams, where someone is tricked into sending money online to a fraudster posing as a genuine payee.
Where things go wrong firms will always look to put it right.— UK Finance spokesperson
A UK Finance spokesperson said: “The financial services sector takes complaints seriously.
“Where things go wrong firms will always look to put it right and provide good outcomes for customers.
“Credit card companies and lenders must comply with strict regulatory rules to assess whether lending is affordable and they also provide a wide range of support to anyone concerned about their finances or repayments.
“Meanwhile, the financial services industry prevents over £1 billion of fraud taking place every year, and is currently the only sector which reimburses victims.”
The ombudsman said it is seeing more cases across the board, with 198,798 new complaints in 2023-24 compared with 165,149 the previous year.
Indications suggest the trend is continuing into the current financial year, it added.
It's always concerning when you see cases rise so significantly, particularly when so many people are struggling in the current economic climate.— Abby Thomas, chief ombudsman
The service said the way it categorises complaints has changed over the years, but its figures show the number of banking complaints in 2023-24 is the highest in at least a decade.
Abby Thomas, chief executive and chief ombudsman at the FOS, said: “It’s always concerning when you see cases rise so significantly, particularly when so many people are struggling in the current economic climate.
“Whether someone is the victim of a fraud, struggling with credit card debt, or having issues with their overdraft, they deserve support and understanding from their financial provider.
“It is imperative that all businesses treat their customers fairly and in a timely manner.
“If consumers don’t feel they’ve been treated fairly, they should contact our free, independent service and we’ll investigate their complaint.”
Across all categories, complaints are increasingly being brought by claims management companies and professional representatives, the service said.
They accounted for a quarter of cases in 2023-24 compared with less than a fifth (18 per cent) the previous year.
We are committed to making our service as accessible as possible, while ensuring it remains free for all customers and that those with upheld complaints can keep all of any reward we make.— James Dipple-Johnstone
The FOS said it has seen examples of good and bad practice by professional representatives. It highlighted concerns about mass claims submitted by some, and others failing to respond to requests for evidence, slowing down investigations.
When complaints are upheld, professional representatives can take a chunk of the redress awarded to their clients, but consumers can take their case directly to the FOS and keep all the compensation.
In recent months, the service has been consulting on a proposed case fee for professional representatives, aiming to make the fee model “fairer”.
Professional representatives would be charged up to £250 to bring a case, reduced to £75 if the outcome is determined in favour of the consumer.
James Dipple-Johnstone, deputy chief ombudsman at the FOS, said: “A quarter of all cases coming to the ombudsman were brought by professional representatives in the last financial year.
“While they have an important role to play in resolving financial disputes, they can also gain financially from our service without contributing to the running costs. There is sometimes little evidence of due diligence by some representatives to ensure claims they advance have merit.
“We are committed to making our service as accessible as possible, while ensuring it remains free for all customers and that those with upheld complaints can keep all of any reward we make.
“Our proposed charges aim to ensure we cover the costs associated with resolving disputes while reflecting a fairer allocation of those costs.”
Across all financial products, the FOS upheld 37 per cent of the complaints it resolved, which is slightly higher than the 35 per cent recorded in 2022-23.
Rocio Concha, Which? director of policy and advocacy, said: “These damning figures show how consumers are being badly let down by their banks in important everyday areas including credit cards, current accounts and insurance.
“It is particularly concerning to see such an increase in the number of complaints about fraud. This underlines the importance of new rules due to come into force soon that will make it mandatory for the vast majority of scam victims to be reimbursed and treated more fairly and consistently.”
