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.