Complaints to the financial ombudsman about payday loans have almost tripled in a year, despite tougher regulation of the much maligned sector, figures show.
Figures from the Financial Ombudsman Service (FOS) showed Payment Protection Insurance (PPI) is still the most-complained about product with up to 4,000 cases arriving a week, although this is down to 188,700 from 205,000 the previous year.
However, payday loans saw the biggest complaints spike rising 178% from 1,157 to March 2015 up to 3,216 now. The service said payday loans made up a significant number of the complaints resolved from younger people – but featured less prominently among the most complained-about products for people over 35.
The jump in numbers follows a regulatory clampdown after the FCA started policing the sector in April 2014.
Payday lenders were required to make tougher affordability checks, their adverts now come under greater scrutiny, and price caps on the loans took effect in January 2015, resulting in lower borrowing costs for many.
The ombudsman service said the increase in payday loan complaints “reflected people’s growing awareness of their rights when things go wrong”, and also the high levels of publicity around these products following FCA action to tackle unfair practices at some firms.
The number of consumers unhappy about fee-charging packaged current accounts has also soared, with complaints now running at more than 120 a day.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
