Increase in Case Resolution by Financial Ombudsman Amidst Rise in Annual Complaints by 54%
The Financial Ombudsman Service (FOS) has reported a significant increase in financial complaints for the 2024/25 financial year, marking the highest volume seen since the payment protection insurance crisis in 2018. With over 305,000 complaints received, this represents a 54% rise compared to the previous year, signalling a growing need for effective dispute resolution in the financial sector.
This surge in complaints can be attributed to several factors. Credit affordability disputes almost doubled from the previous year, with complaints about irresponsible or unaffordable lending reaching 71,685. Motor finance commission cases also saw a dramatic increase, reflecting a major rise in disputes related to car finance. Issues involving fraud and scams also rose, contributing to more complex and frequent disputes.
Interestingly, around half of all complaints were brought by professional representatives in 2024/25, up from 25% the previous year. This suggests a growing involvement of organised or supported claims, particularly in the credit affordability and car finance sectors.
The FOS acknowledges that this high demand has impacted the speed of case handling. In response, they are recruiting more caseworkers, modernising their structures, and transforming digital services to better serve consumers and small businesses. They are also working closely with HM Treasury and the Financial Conduct Authority (FCA) to modernise the dispute resolution system and ensure timely and fair outcomes in a rapidly changing financial environment.
Despite the increase in complaints, the FOS upheld approximately 34% of complaints in favour of consumers in 2024/25, slightly down from the previous year. Complaints brought by professional representatives were upheld at around 27%, whereas those directly from consumers had a higher uphold rate of about 37%.
The FOS is focused on reducing its stock of older cases and resolved 227,253 complaints in 2024/25, an 18% increase compared to the previous year. The organisation's modernisation aims to create a trusted and effective financial ombudsman, supporting a strong economy.
The increase in complaints has mainly been focused on credit affordability and car finance complaints. In response, the FOS has introduced charges for professional representatives who bring more than 10 complaints a year, aiming to bring better balance to the organisation's fee model and to encourage representatives to submit better-evidenced complaints.
Jenny Simmonds, interim chief executive at the Financial Ombudsman Service, stated that the organisation is driving forward ambitious plans to transform its service, ensuring it remains fit for the future amidst the evolving financial services landscape.
The increase in financial complaints, predominantly involving credit affordability and car finance, has been linked to an influx of disputes related to irresponsible or unaffordable lending, motor finance commission cases, and fraud and scams. To address this issue, the Financial Ombudsman Service (FOS) is making efforts to modernize its structures, upgrade digital services, and recruit more caseworkers, aiming to handle cases more efficiently. Additionally, the FOS has introduced charges for professional representatives who file more than 10 complaints a year to encourage them to submit better-evidenced complaints.
