CFA welcomes another fall in quarterly ‘payday’ complaints but warns this may only be a temporary respite for short-term lenders

Numbers released this morning by the Financial Ombudsman Service show that complaints during Q1 of the FOS complaints year (starting 1st April 2019) are down considerably on the same period last year. This also reflects a general trend downwards over a series of quarterly publications.

Jason Wassell, CEO of the Consumer Finance Association said,

“We have seen a series of quarterly drops in the number of ‘payday’ complaints. That has to be some good news for our members dealing with historic cases dating back several years. However, the statistics show that this is primarily due to a reduction in complaints from CMCs, as some go through the authorisation process and have temporarily calmed their worst behaviours. Complaints to the FOS from CMCs have dropped from 8 in 10 to 6 in 10.”

“In a system where the lender pays a fee win or lose, the volume of complaints can have a massive impact on small lenders. We are reliant on the regulators and the FOS asking questions about how customer data is being passed around, and whether any due diligence is carried out on any claims. This may be a temporary respite, lenders are still on the receiving end of some very poor practice by CMCs. We also hear of other CMCs, and legal firms not regulated by the FCA, holding back complaints of questionable provenance and varied quality.”

The CFA also represents members that provide longer, instalment loans. In the past, there has been some confusion around definitions but this seems to have settled.

 

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