Complaints about car insurance and vehicle finance have surged by 75%, according to the Financial Ombudsman Service (FOS), marking a substantial increase in grievances concerning
vehicles.
These vehicle-related complaints now constitute a quarter of the cases handled by the FOS, with a remarkable 75% rise within a year. The surge primarily revolves around issues regarding insurance claims and vehicle finance matters.
However, the majority of car finance cases are now brought forth by claims management companies (CMCs), raising concerns about the quality of these cases and their representation of consumers.
The spike in insurance complaints includes disputes over valuations, problems with customer service, and delays in claim payouts during the second quarter of this year. The FOS recorded its highest level of complaints about car and motorbike cover in over five years, tallying 4,036 complaints.
Regarding vehicle finance, the Ombudsman received 4,622 complaints about hire purchase and 1,569 about conditional sale agreements. In total, the FOS handled 11,869 vehicle-related complaints in Q2 of this year, a stark increase from 6,744 in the same period the year before.
FOS CEO Abby Thomas expressed concern about the notable rise in vehicle-related complaints, emphasizing the importance for firms to treat customers transparently and fairly, especially considering the significant costs and stress involved in buying vehicles.
Furthermore, the FOS warned consumers about the increasing involvement of claims firms in filing car finance complaints, highlighting that while these firms accounted for a significant number of complaints, only 8% of their cases were successful, compared to 42% success rates for cases initiated by customers directly.
The report also revealed a rise in complaints about current accounts and credit cards. Current accounts remained the most complained-about product, increasing by a third compared to the previous quarter, while credit cards saw a considerable increase as well.
Despite an overall increase in complaints across financial products, the FOS upheld 37% of the resolved complaints, showcasing a slight increase from the previous quarter's 34% uphold rate. Photo by P Clark, Wikimedia commons.