Financial firms dealing with complaints payout £243m in first half of year

Financial services firms received 1.87 million complaints in the first half of this year and paid out an average on average £201 to people complaining

Financial services firms received 1.86 million complaints in the first half of this year and paid out £243 million in financial redress, according to the financial regulator.

Of this, £213 million was paid to over 1 million people who had their complaint upheld by the firm. The remaining £30 million was paid as a goodwill gesture for complaints not upheld by the company.

The Financial Conduct Authority (FCA) said that since complaints about payment protection insurance (PPI) peaked in 2020, half-yearly complaints have remained relatively constant at between 1.8 million and 2.0 million.

Banking and credit cards most complained about sector

Banking and credit cards remain the most complained about products but were down 9.6% from 941,664 in the previous 6 months to 850,948 in January to June 2024. The average compensation and goodwill payment was £189 for people complaining. 

Complaints related to pensions, insurance and investments increased between the second half of last year and the first half of 2024, the regulator said. 

The highest average payouts were for upheld pension complaints at £638, followed by investments at £591.

Overall, the percentage of complaints that were upheld by firms remained at 57% between the second half of 2023 and the first half of 2024.

Financial ombudsman reports 40% increase in escalated complaints

The Financial Ombudsman Service reported a surge of more than 40% in the first half of this year compared with the same period last year.

The ombudsman resolves complaints that have been escalated by consumers who don’t get a satisfactory response from the companies they deal with.

It received 133,019 complaints between January and June 2024 compared with 93,114 complaints in the same period in 2023.

Banking and consumer credit also continues to be the most complained about sector, the service said.

In the first six months of 2024, consumers lodged 101,031 banking and credit complaints. This compares to 56,690 complaints submitted by people in the first six months of 2023.

Disputes about credit cards and unaffordable lending, car finance woes as well as fraud and scams were the main causes of the rise in complaints.

This comes after new data suggests 9 million people caught out by financial scams in the past year. Citizens Advice found one in five people across the UK fell victim to a financial scam – such as a fake pension or investment opportunity – over the past year.

Abby Thomas, chief executive and chief ombudsman at FOS, said: ‘Businesses should put consumers at the heart of their service but the high level of complaints we receive shows that’s not always the case.

‘It’s vital that businesses are open and transparent with their customers, treating them with fairness and understanding.’

Increase in complaints raised by professional representatives

Over half of all banking and credit complaints were brought by professional representatives, compared to just a quarter in 2023.

‘Whilst professional representatives have an important role to play, they must ensure that their cases are well evidenced and have merit,’ Thomas added.

In the first six months of 2024, the FOS upheld 35% of complaints in consumers’ favour, compared with 37% in the first half of 2023.

The Financial Conduct Authority said it doesn’t have data that breaks down compensation paid from claims raised by professional representatives versus consumers. 

Read our guide to your rights when using a claims management company – and free alternatives to claiming compensation. 

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