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Complaints to the UK ombudsman about alleged mis-selling of automotive finance have greater than doubled from a yr earlier, growing the urgency for regulators to hunt an answer to the rising controversy.
The surge in complaints about automotive financing contributed to a greater than 50 per cent bounce within the total variety of new circumstances dropped at the Monetary Ombudsman Service, to 73,692, within the third quarter in comparison with the identical interval a yr in the past.
The FOS, which resolves shopper complaints in opposition to monetary companies firms, printed knowledge on Wednesday displaying complaints about automotive financing reached 11,817 within the third quarter, up from 4,622 a yr earlier.
Whereas the variety of new automotive financing circumstances being dropped at the FOS dipped from 15,925 within the second quarter, serving to complete circumstances to additionally barely decline, it’s prone to gasoline additional requires the UK to reform the way it handles shopper issues.
Turmoil in car financing deepened final month after the Courtroom of Attraction dominated it was illegal for automotive sellers to obtain fee from motor finance suppliers, until the funds had been correctly disclosed to the client and consent had been given.
Analysts estimate the automotive finance controversy may power banks to pay as much as £30bn of redress. This has additionally disrupted the provision of loans to automotive patrons, left the FOS struggling to deal with the quantity of circumstances and compelled the FCA to pause the complaints course of.
Earlier this month, chancellor Rachel Reeves known as for an enchancment in how the FOS and Monetary Conduct Authority work collectively to keep away from “historic market observe and mass redress occasions”.
Since then, the 2 establishments have presented plans for overhauling the best way monetary complaints are dealt with, reminiscent of giving firms longer to reply to buyer complaints and lowering the scope to attraction in opposition to ombudsman selections.
The FOS has additionally introduced plans to start charging fees to claims managers and different skilled representatives of customers, which it mentioned have been behind a 3rd of all complaints it handles and 85 per cent of bank card circumstances.
The FOS mentioned complaints about monetary fraud and scams reached a file excessive, including to fears that cybercriminals are more and more preying on the net monetary actions of British customers.
The ombudsman obtained 9,091 circumstances about fraud and scams within the final quarter, up 45 per cent from a yr earlier. Lots of the circumstances concerned cryptocurrency scams, it mentioned.
“It’s regarding to see yet one more rise in fraud and scams circumstances coming to our service,” mentioned Abby Thomas, FOS chief govt.
“Folks can really feel embarrassed to have fallen sufferer to a fraud or rip-off and could also be reluctant to report the problem, however these crimes may be complicated and extremely convincing and no one needs to be afraid to come back ahead,” she added.
The ombudsman mentioned there had been a notable rise of multi-stage frauds, the place funds go via a number of banks earlier than reaching the fraudster.
“That is significantly prevalent in cryptocurrency funding scams in addition to ‘secure account’ scams, the place individuals are chilly known as by fraudsters posing as a trusted entity, reminiscent of their financial institution, and persuaded to switch cash to a different account,” it mentioned.
