United Kingdom (and EU regulation)

FOS Ombudsman News issue 119

By on August 20, 2014 Posted in Retail, United Kingdom

The Financial Ombudsman Service (FOS) has published issue 119 of Ombudsman News. Items of interest include:

case studies on short-term credit;
an interview with Juliana Francis, senior ombudsman, on the FOS’ perspective on payday lending; and
Q&As on the application of the FCA’s consumer credit rules, on the impact of the FOS regime on consumer advisers offering debt advice and on whether the FOS can consider a complaint concerning a credit broker.

The news issue identifies the following themes arising from the complaints received by the FOS:

on balance, the FOS sees things moving in the right direction. There are encouraging signs that businesses are renewing their customer focus and trying to make things better;
complaints received in relation to high interest rates and high charges make up only 4% and 3% of cases, respectively;
one in six payday lending complaints are about loans that consumers say they have not taken out. Fraudulent loans are an issue but the FOS sees this problem as down to the lenders themselves who often compete on speed as well as on price. In some instances the FOS believes that lender’s checks have not been secure or detailed enough to prevent fraud taking place;
the inappropriate use of continuous payment authorities and debt-collection methods features in one in five cases received by the FOS;
in too many instances, people are being given misleading, late or incomplete information about their referral rights of complaint to the ombudsman; and
last year featured 794 payday lending complaints cases. This is a 46% increase on the previous year, but the FOS suspect that this is just the tip of the iceberg.