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Annual Complaints Data 2023/24: Key Trends and Insights

The latest Annual Complaints Data from the Financial Ombudsman Service for 2023/24 provides a view into the evolving landscape of consumer grievances within the financial sector. This year, we’ve witnessed a significant rise in complaints, particularly concerning banking and payments, signalling emerging areas of concern and providing a roadmap for improvements. Here’s a closer look at the key trends and insights from the report.

Record-Breaking Complaints

The total number of new complaints in the banking and payments sector has reached its highest level in at least a decade. This increase shows a growing dissatisfaction among consumers, mainly issues related to current accounts and credit cards. The previous peak was seen in 2015/16, however current data shows a wider range of more urgent issues.

Key Statistics:

  • Total New Complaints: Up from 61,995 in 2022/23 to a record number this year.
  • Fraud and Scams: Over 27,000 new cases, with approximately 50% involving Authorised Push Payment (APP) scams.
  • Current Accounts: Remain the most complained-about product, with 30,635 new cases, including over 20% related to fraud and scams.
  • Credit Card Complaints: Increased to 24,402 cases, with more than 13,000 concerning perceived irresponsible or unaffordable lending.

These figures highlight a critical need for financial institutions to enhance their customer service and fraud prevention measures.

Growing Influence of Professional Representatives in Complaint Filings

A significant trend this year is the rise in complaints filed by professional representatives, such as claims management companies (CMCs).  This shift highlights the increasing influence of these representatives in the complaints process.

Key Points:

  • Proportion of Cases: 25% of complaints were handled by professional representatives.
  • Consultation on Fees: The Financial Ombudsman Service has proposed changes to the fee structure for CMCs to ensure a fairer model.

Consumers can file complaints directly, allowing them to retain 100% of any compensation awarded. This option is a crucial part of the commitment to consumer protection.

Credit Card Complaints:

  • Total New Complaints: 24,402
  • Unaffordable Lending: Over 13,000 cases.
  • Previous Year: 14,504 credit card complaints, with 3,733 related to irresponsible lending.

The sharp rise in complaints about credit cards, especially around unaffordable lending, shows consumers’ increasing concerns about the suitability and fairness of financial products.

Hire Purchase (Motor):

  • Total New Complaints: 21,441 (up from 11,446 the previous year).
  • Motor Finance Commission Issues: Many complaints are related to commission, with around 90% of these cases handled by professional representatives.

The rise in hire purchase complaints shows ongoing problems with motor finance and a need for clearer and fairer agreements.

Insurance Complaints:

  • Total New Complaints: 47,010
  • Car/Motorcycle Insurance: 16,322 complaints, up by 38% from the previous year.
  • Common Issues: Claim delays, declined claims, and dissatisfaction with payout amounts.

The rise in insurance complaints, particularly about car and motorcycle insurance, highlights the difficulties consumers have with claim processing and claim value.

Conclusion

The Annual Complaints Data for 2023/24 highlights the financial sector’s current challenges. The rise in complaints reflects ongoing consumer frustrations that need to be addressed. Financial institutions must focus on improving customer service, enhancing fraud prevention, and ensuring fair lending practices.

As we move forward, it’s crucial for both consumers and financial institutions to stay informed and proactive. For a more detailed analysis, including the full data set and additional insights, we encourage you to review the complete report here.

Managing complaints effectively is essential for growth. Get in touch to find out how Momenta can assist you with improving your strategies, cutting risks, and boosting your business success. Get in touch with our experts Stephen Higgs and Harry Lee to learn how Momenta can help you turn complaints into opportunities