The ombudsman service has reported a surge in financial complaints by approximately a fifth, with banking and credit complaints being the primary contributors to this increase.

According to the Financial Ombudsman Service (FOS), the number of financial complaints received in the second half of 2023 saw a nearly one-fifth rise compared to the same period the previous year.

The free-to-use service, established to resolve disputes between consumers and financial businesses, recorded a total of 95,349 complaints from July 1 to December 31, 2023. This figure is 19.3 percent higher than the 79,921 complaints received during the same period in 2022.

Banking and credit complaints were identified as the main cause of the increase, with current accounts and credit cards accounting for over 40 percent of cases within this sector. The service noted that current account complaints continue to be dominated by disputes over fraud and scams.

In the second half of 2023, there were 62,139 new banking and credit complaints, an increase from 50,346 in the second half of 2022.

The ombudsman recorded 5,660 credit card complaints in the last three months of 2023 the highest number on its records dating back to the start of the financial year 2014/15.

This spike was attributed to an increase in perceived unaffordable and irresponsible lending by financial firms, according to the ombudsman.

Of the credit card complaints during the quarter, 3,086 were due to perceived unaffordable or irresponsible lending by financial firms.

In the corresponding quarter of the previous year, there were 3,216 credit card complaints lodged, with 665 pinpointing issues of irresponsible or unaffordable lending.

The Financial Ombudsman Service (FOS) has also reported a surge in general insurance cases, with car and motorcycle insurance grievances experiencing a particularly steep climb.

The rise is attributed to ongoing delays by firms in resolving claims and disputes over vehicle valuations, according to the service.

In the latter half of 2023, there were 22,845 new complaints related to general insurance and pure protection, marking an increase from the 19,346 complaints filed in the same period the year before.

Abby Thomas, the chief executive and chief ombudsman at FOS, commented: “In light of the continuing economic challenges people face, it’s always concerning to see complaint levels continue to rise.”

She emphasised the critical nature of customer relationships with banks and insurers, as many depend on these institutions for their homes, vehicles, and livelihoods. Thomas expressed her commitment to ensuring that firms foster a fair and transparent environment for all consumers.

Thomas also reminded customers: “If customers don’t feel they’ve been treated fairly, they can come to our free and independent service, and we’ll investigate their complaint.”

During the final six months of 2023, the ombudsman service ruled in favour of consumers in 36% of cases, a slight increase from the 34% success rate in the second half of 2022.