Q3 complaints to Financial Ombudsman leap 40%

The UK Financial Ombudsman Service (FOS) received 20,000 more complaints in Q3 2024/25 than in the same quarter the previous year, according to data it published today.

Motor finance complaints were the largest single cause of complaint, with a fresh wave of complaints triggered by the Court of Appeal decision in October the FOS said. In all, it received treble the number (18,658) of motor finance complaints in Q3, up from 6,679 a year earlier.

The Court of Appeal decision in October 2024 greatly expanded the number of customers who could bring complaints for mis-selling against their lender and broker. The decision is being appealed to the Supreme Court next month, and the Financial Conduct Authority (FCA) has extended the pause for lenders dealing with motor finance complaints beyond those involving deferred commission agreements, pending the court’s decision.

“We are continuing to see high volumes of motor finance commission cases and would encourage businesses to consider whether complaints are covered by the FCA’s temporary complaint handling rules,” said interim chief ombudsman James Dipple-Johnstone. The ongoing legal proceedings were also affecting their ability to issue final decisions in motor finance cases, he added.

Irresponsible lending and fraud

The second most complained about product in the quarter was credit cards — FOS received almost 11,000 new complaints. While this was double the volume it received in the same period a year earlier it was 50% less than received in Q2, 2024/25. The vast majority of credit card cases lodged in Q3 related to claims about unaffordable or irresponsible lending.

Current accounts were the third most complained about product – FOS received 8,830 complaints in Q3, 1000 more than the same quarter a year earlier. The ombudsman said that the majority of current account complaints related to authorised push payment complaints also involved where customers had used their payment card to “invest” in fraudulent investment.

Since last October, banks and payment firms have been required to reimburse APP payments automatically, unless they can prove the customer ignored warnings before making the payment. The FOS said it looks at whether a bank did enough to protect its’ customers from falling victim to a fraud and scam.

According to industry trade body, UK Finance’s Annual Fraud Report the overwhelming majority of investment scams originate online, on social media platforms. Yesterday, Ofcom, the regulator that oversees social media and technology platforms in the UK, said it had begun monitoring platforms to check they are “meeting their illegal content risk assessment duties and record keeping duties” under the Online Safety Act 2023.

Claims management companies

According to the FOS, claims management companies (CMC) submitted 47% of all complaints in the first three quarters of 2024/25 and a “high volume” of complaints received in each of three product-types mentioned above. From next month, the will charge a £250 per case fee to any CMC that submits more than 10 cases in a single year.

It has previously said that many CMC submissions lack the information it needs to make decisions. In a statement accompanying this morning’s data, the FOS said it upheld significantly fewer complaints submitted by CMCs than directly by consumers and small businesses – 26% compared to 36%.