Guarantor loans have overtaken PPI as the most complained about product that the financial ombudsman is now seeing.
In a sign the PPI scandal is finally drawing to a close, for the first time since 2007 payment protection insurance was not the most complained about product in the Financial Ombudsman Service’s data.
More than 10,000 complaints about guarantor loans were received between October and December 2020, compared with just over 300 complaints in the same period a year earlier.
With a guarantor loan, someone else, often a family member, promises to pay off the debt if the borrower is unable to.
In the latest quarter, the ombudsman service also received more than 6,000 complaints about home credit compared to 430 complaints in the same period a year earlier.
The most complained about issue during the latest quarter was people saying they could no longer afford borrowing they had previously taken out, and in some cases that the borrowing had never been affordable for them in the first place, the ombudsman said.
It added: “The rules and guidance around lending and supporting people in financial difficulty are well-established – and we are actively engaging with lenders to ensure that they’re responding effectively and fairly to their customers’ concerns.”
PPI is the biggest mis-selling scandal that the ombudsman service has ever seen.
The deadline for complaining about PPI to the companies involved was in August 2019, although if customers were not happy with the response they could still take their complaint to the ombudsman after this date.
The ombudsman service received 6,679 PPI complaints between October and December 2020, compared with over 41,500 complaints in the same period a year earlier.
The last time PPI was not the most complained about product in the quarterly data was in the third quarter of 2007, when credit cards attracted the majority of gripes.
Caroline Wayman, chief executive of the ombudsman service, said: “The Financial Ombudsman Service continues to help thousands of people a week who are unhappy with their financial provider.
“For more than a decade, our service received an unprecedented number of complaints about PPI. As expected, after helping over two million people we have now nearly completed our work on PPI.
“Excluding PPI, new complaints are up by over 55% compared to the same period last year, with more and more people asking for our help to resolve problems with financial businesses.
“If you think you’ve been treated unfairly by your provider, you should get in contact with the Financial Ombudsman Service and we’ll see if we can help.”
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