Customer complaints about credit cards continue to fall

The number of complaints received by the financial ombudsman service about credit cards has fallen for the third consecutive year.

The ombudsman’s annual review of consumer complaints, published today, reported 8,200 received complaints in 2016, down from 19,634 in 2013; a drop of 58% over three years.1

Many of the complaints received were about claims made under section 75 of the Consumer Credit Act 1974.

This clause gives users protection against paying off debt for goods they didn’t receive or that were faulty. Under section 75 the credit provider is equally liable if something goes wrong; if your purchase qualifies, you can claim a refund from the credit card provider if you are unable to recover your money from the supplier.

To qualify for section 75 cover, an individual purchase must be over £100 and you must pay for at least some part of it with your credit card.

Despite this protection having been in place for over 40 years, the financial ombudsman’s report noted that “in a significant number of cases we had to clarify these legal responsibilities to the card providers”.

Complaints about unsecured loans were also down slightly year on year, from 6,255 in 2015, to 6,156 in 2016.

The ombudsman noted that some of these complaints were from people who had been refused loans on the ground of affordability.

It is not within the ombudsman’s remit to say whether or not someone should or should not be considered eligible for a loan, however, they did recommend that had the lenders explained the reasons for declining users’ applications more fully, some of these complaints might have been avoided.

It’s good to see this trend moving in the right direction and, as we work to make the UK consumer credit market fairer, we hope that we’ll continue to see a fall in the number of people seeking recourse from the financial ombudsman service.

1. Financial Ombusdman Service. Annual review of consumer complaints about insurance, credit, banking, savings & investments, financial year 2015/2016.

   

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