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Complaints to the UK ombudsman about alleged mis-selling of automotive finance have greater than doubled from a yr earlier, growing the urgency for regulators to hunt an answer to the rising controversy.
The surge in complaints about automotive financing contributed to a greater than 50 per cent leap within the general variety of new instances dropped at the Monetary Ombudsman Service, to 73,692, within the third quarter in comparison with the identical interval a yr in the past.
The FOS, which resolves shopper complaints towards monetary companies corporations, revealed knowledge on Wednesday exhibiting complaints about automotive financing reached 11,817 within the third quarter, up from 4,622 a yr earlier.
Whereas the variety of new automotive financing instances being dropped at the FOS dipped from 15,925 within the second quarter, serving to complete instances to additionally barely decline, it’s prone to gasoline additional requires the UK to reform the way it handles shopper considerations.
Turmoil in car financing deepened final month after the Courtroom of Enchantment dominated it was illegal for automotive sellers to obtain fee from motor finance suppliers, until the funds had been correctly disclosed to the client and consent had been given.
Analysts estimate the automotive finance controversy might pressure banks to pay as much as £30bn of redress. This has additionally disrupted the provision of loans to automotive consumers, left the FOS struggling to deal with the amount of instances and compelled the FCA to pause the complaints course of.
Earlier this month, chancellor Rachel Reeves referred to as for an enchancment in how the FOS and Monetary Conduct Authority work collectively to keep away from “historic market follow and mass redress occasions”.
Since then, the 2 establishments have presented plans for overhauling the way in which monetary complaints are dealt with, corresponding to giving corporations longer to answer buyer complaints and lowering the scope to attraction towards ombudsman selections.
The FOS has additionally introduced plans to start charging fees to claims managers and different skilled representatives of shoppers, which it mentioned have been behind a 3rd of all complaints it handles and 85 per cent of bank card instances.
The FOS mentioned complaints about monetary fraud and scams reached a report excessive, including to fears that cybercriminals are more and more preying on the web monetary actions of British shoppers.
The ombudsman obtained 9,091 instances about fraud and scams within the final quarter, up 45 per cent from a yr earlier. Lots of the instances concerned cryptocurrency scams, it mentioned.
“It’s regarding to see yet one more rise in fraud and scams instances coming to our service,” mentioned Abby Thomas, FOS chief government.
“Folks can really feel embarrassed to have fallen sufferer to a fraud or rip-off and could also be reluctant to report the difficulty, however these crimes may be complicated and extremely convincing and no person needs to be afraid to come back ahead,” she added.
The ombudsman mentioned there had been a notable rise of multi-stage frauds, the place funds move via a number of banks earlier than reaching the fraudster.
“That is notably prevalent in cryptocurrency funding scams in addition to ‘protected account’ scams, the place persons are chilly referred to as by fraudsters posing as a trusted entity, corresponding to their financial institution, and persuaded to switch cash to a different account,” it mentioned.
