Staggering sum paid out by financial firms in redress is revealed after 1.86m complaints

Financial services companies received 1.86 million complaints in the first half of this year, leading to £243m in compensation payouts, reveals the City watchdog.

The Financial Conduct Authority (FCA) shared these figures on its website, noting that since the peak of payment protection insurance (PPI) complaints in 2020, semi-annual complaints have remained fairly steady, ranging between 1.8 million and 2 million. The regulator highlighted an increase in complaints related to pensions, insurance and investments from the second half of last year to the first half of 2024.

However, complaints about banking and credit cards, as well as home finance, saw a decrease during the same period. The FCA reported drops in the three most complained about products: current accounts, motor and transport-related issues, and credit cards.

In the first half of this year, there were 492,557 complaints about current accounts, marking a 4.5% drop compared to the previous six months. Motor and transport-related complaints numbered 276,469, a 1.7% decline on the previous six months.

Meanwhile, credit card complaints totalled 222,529, a 4.4% fall compared to the previous six months. Overall, firms upheld 57% of complaints between the second half of 2023 and the first half of 2024.

The average payout for upheld complaints in the first half of this year was £201. The Financial Ombudsman Service (FOS), the body tasked with resolving disputes between consumers and firms, has flagged a 40% surge in complaints within the first half of this year against the same time frame last year.

They've received 133,019 complaints from January to June 2024, a significant leap from the 93,114 grievances recorded during the same months in 2023. Banking and credit complaints hold the top spot for consumer dissatisfaction, according to FOS data.

The six-month period of 2024 saw an influx of 101,031 banking and credit complaints, covering credit card disputes, unsustainable lending, car finance issues, as well as fraud and scam incidents, with more than half these complaints coming via professional representatives.

Abby Thomas, the chief executive and chief ombudsman at FOS, commented: "Businesses should put consumers at the heart of their service but the high level of complaints we receive shows that’s not always the case. It’s vital that businesses are open and transparent with their customers, treating them with fairness and understanding."

"Whilst professional representatives have an important role to play, they must ensure that their cases are well evidenced and have merit."

In the first six months of 2024, the FOS upheld 35% of complaints in consumers’ favour, compared with 37% in the first half of 2023.