Complaints about car financing, insurance race up UK ombudsman's in-tray
Reuters
Published Dec 14, 2023 00:06
Updated Dec 14, 2023 00:26
By Huw Jones
LONDON (Reuters) - Britain's Financial Ombudsman Service (FOS) said on Thursday that complaints about financing and insuring cars have spiked as claims management firms pile in with "speculative" claims that are mostly rejected.
FOS, which handles complaints that people are unable to settle directly with a financial firm, said that in the second quarter of this year vehicle-related complaints shot up to become 25% of all cases, reaching a five-year high.
There were 4,622 complaints about car hire purchase agreements, 1,569 about conditional sales, or where a customer owns the car after all payments are made, and 4,036 complaints about motor insurance.
"Buying a vehicle can be costly and stressful, and we're now also increasingly hearing from people worried about whether they can pay their finance deals," Abby Thomas, chief executive and chief ombudsman at FOS, said in a statement.
The vast majority of complaints about car finance agreements are being submitted by claims management firms, but the "uphold" rate for complaints from such firms is just 8%, compared with a 42% uphold rate when cases are brought directly by consumers, FOS said.
"While professional representatives can play an important role in resolving financial disputes, we're seeing too many speculative and poorly evidenced complaints," James Dipple-Johnstone, deputy chief ombudsman, said.
The two other categories in the top five complaints were current accounts at banks - the most complained about product overall - and credit cards.
FOS does not charge for handling complaints, but last week it launched a public consultation on new powers to charge claims management firms and other professional representatives.
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Written By: Reuters
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