The Financial Ombudsman (FOS) complaint statistics for April-Jun 2019 have just been published, see Product Complaints Data.
For guarantor loans, FOS decided in favour of the consumer in 83% of cases.
That is a dramatic increase from the uphold rate of only 32% for the previous financial year
I have been saying for several months that almost all affordability complaints by both borrowers and guarantors are being won at the moment. These new statistics are evidence for this.
Here I look in detail at two recently published Ombudsman decisions:
- Amigo did not check properly that a borrower could afford the loan; and
- Amigo – why the Ombudsman released a guarantor from a loan.
And this article Amigo loans – more refunds being paid! looks at extracts from unpublished adjudicator decisions this quarter.
Most complaints and decisions are about Amigo as they have about 85% of the guarantor loan market. But there have also been decisions against smaller guarantor lenders.
Here are my template letters to help people complaint about guarantor loans:
Other FOS statistics on high-cost credit
The FOS uphold rate for payday loan refunds has risen to 62% in this quarter.
And 73% of instalment loans cases – complaints against payday lenders offering slightly longer-term loans such as Lending Stream, On Stride, Myjar and Satsuma – have been upheld.
The uphold rate for payday loans and instalment loans has increased this quarter from the average over the last financial year. I suspect this was because of the large number of very weak complaints lodged by some claims companies last year.
Lenders should improve their complaint handling
Caroline Wayman, FOS chief ombudsman, said:
The increase in the proportion of upheld complaints about high-cost credit products shows that there is still more for businesses to do to respond to customer concerns, so if you are unhappy with a financial business, get in touch with the Financial Ombudsman Service and we’ll see if we can help.
I agree. The FCA’s DISP rules say lenders should learn from FOS decisions and apply the same principles to their complaint handling.
To its credit, Amigo appears to be doing this. Over the last two months, there has been a steady stream of readers reporting that Amigo, who used to reject almost all affordability complaints, has upheld their complaint.
But too many payday lenders don’t yet seem to be doing this.