Complaints about payday loans almost triple in a single year
Despite the introduction of new lending regulations in January 2015, there was a 178 per cent increase in the number of disputes about payday loans in the year to March, according to annual statistics from the Financial Ombudsman.
In that time period, more than one million people complained about financial services, with mis-sold PPI and pet insurance among the issues people were having.
Last year, the Financial Conduct Authority was placed in charge of regulating the payday loans market, to protect customers more and prevent them from getting into spiralling debt. There were also changes to the rules, such as that lenders could not charge more than 0.8 per cent interest per day.
There were 1.6 million total enquiries which the Ombudsman had to handle in the time period, with one in five being formally investigated. The figures indicate that 50 per cent of complaints resolved went in favour of the consumer, overall.
Although the last 12 months had been a busy period, Chief Ombudsman Caroline Wayman highlighted that the main focus was on helping the people who made complaints, rather than how many were made.
She said: “We mustn’t lose sight of the lives and livelihoods behind every complaint we resolve. That’s why preventing mistakes of the past from happening again will help restore trust and fairness in financial services.”
Payday loans were not as complained about as mis-sold PPI however, which was the worst offender with 188,712 new complaints made, although this was 8 per cent lower than the previous year.