The number of complaints made to the Financial Ombudsman Service (FOS) relating to mortgages fell from 8,421 last year to 7,802 in the 12 months to March 2024.
Some 28% of all claims were upheld.
Within this, 6,515 complaint cases related to first charge residential mortgages, where there was a 29% uphold rate. Some 8,098 enquiries about first charge residential mortgages were made to the FOS over the period.
Of the 1,002 enquiries made about buy-to-let (BTL) mortgages, there were 917 cases and 26% of complaints were upheld.
Some 358 cases about equity release were opened by the FOS, out of the 398 enquiries made. Some 23% of these complaints were upheld. Lifetime mortgages generated the most complaints within this part of the market, with 343 enquiries and 319 cases opened. Of these, 23% of complaints were upheld.
In April, the ombudsman forecast there would be a rise in mortgage complaints lodged with the service over the 2024/25 period due to the rise in interest rates and the maturity of initial periods.
Banking complaints soar to a 10-year high
Complaints about the banking sector are at their highest level in the last decade, as scams and fraud contribute to the surge.
More than 80,000 complaints relating to banking and payment products were received by the FOS in the 2023/24 financial year.
This is a big jump from the near 62,000 complaints received by the ombudsman in the previous year.
It said concerns about current accounts, credit cards, fraud and scams have driven the significant increase in complaints.
The most complained about product was current accounts, with 30,635 cases raised, up from 26,039 last year.
Meanwhile, 24,402 credit card complaints flooded in, of which 13,584 related to unaffordable or irresponsible lending.
Within the banking sector, it is investigating more fraud and scam complaints than ever before, having risen by a fifth in the latest financial year.
The FOS revealed these complaints are now at their highest level, with 27,312 received. Around half are related to authorised push payment (APP) scams, where an individual is tricked into sending money online to a fraudster posing as a genuine payee.
Elsewhere, the FOS revealed the other three categories in the top five most complained about products were hire purchase (motor), car/motorcycle insurance and conditional sale (motor), all of which saw year-on-year increases.
But, it added that it’s seeing case levels rise across the board, not just in banking, with nearly 200,000 new complaints recorded in 2023/24, compared to 165,000 in 2022/23.
The FOS added that on average, across all financial products, it upheld 37% of the complaints resolved, which is slightly higher than the 35% recorded in 2022/23.
Abby Thomas, chief executive and chief ombudsman of 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.”
Complaints by claims management companies
The ombudsman revealed that across all categories, it is seeing increasing levels of complaints brought by claims management companies (CMCs) and professional representatives.
In the latest financial year, they accounted for a quarter of all cases, up from 18% in the previous year.
The FOS said it had seen examples of both good and bad practice, including some firms that submit mass claims “without determining whether they have merit”. In other cases, they fail to respond to FOS requests for evidence, which slows down its investigations.
It reminded individuals that when using a CMC, if complaints are upheld, they can take a significant proportion of redress awarded. But cases can be taken directly to the ombudsman for free, meaning you get to keep the full compensation awarded.
In recent months, it has been consulting on a proposed up-to-£250 case fee (reduced to £75 if complaint upheld) for professional representatives, aiming to make the fee model fairer.
James Dipple-Johnstone, deputy chief ombudsman of the FOS, said while CMCs have an important role to play in resolving financial disputes, “they can also gain financially from our service without contributing to the running costs”.
He said: “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.”
This article is based on one that first appeared on our sister site, YourMoney.com, here.
Paloma Kubiak is an award-winning journalist with 15 years in the trade. She has the NCTJ qualification in media law and Government, and gained a bursary to undertake the Press Association training where she passed 120wpm in shorthand. Paloma started her journalism career at local paper, the Ealing Gazette and Leader series just at the onset of the global financial crisis. During her time at the paper, she was promoted to senior multi-media journalist.
In 2011, she joined MoneySavingExpert.com as a deals researcher and writer, before moving to the news team as a reporter covering personal finance. She was runner up in the Santander FinCon Media Awards 2014 in the ‘best newcomer’ category.
In 2016, she joined YourMoney.com as a senior reporter. Commended in the 2017 Unbiased Media Awards 2017 for the ‘Best Value of Advice’ article, she then went on to win ‘Household Money Journalist of the Year’ at the 2017 Headline Money Awards. Paloma was also included in the UK’s ‘Wonder Women in Finance’ in the same year, compiled by Finder.com.
She has been writing about and researching personal finance for the past decade and is editor of YourMoney.com.
