Businesses must step up support for people in debt

• Abby Thomas, Chief Executive and Chief Ombudsman, urges financial firms to do more to help struggling consumers.  

• Increasing debt levels have left some consumers feeling confused, stressed and out of their depth.   

• We are seeing increasing levels of complaints about unaffordable lending – with more than 18,000 credit card cases in the first three months of this financial year.   

Abby Thomas highlighted the increasing pressure consumers are facing – with many feeling over-burdened by debt and finding it hard to communicate with businesses.   

Speaking today at debt charity StepChange’s ‘Connected 2024’ conference, Ms Thomas said the Financial Ombudsman Service is in a unique position, able to see a ‘vivid picture’ of the financial services sector, particularly how firms are treating struggling consumers.   

Last year we resolved almost 200,000 complaints.   

In the first three months of this financial year, complaints rose by 70% compared to the published data from the same time last year – with 18,000 credit card cases, of which 15,000 related to irresponsible or unaffordable lending.   

Abby Thomas, Chief Executive and Chief Ombudsman said:  

It’s concerning to see such large volumes of complaints – particularly when they relate to irresponsible and unaffordable lending.   

 It's vital businesses are open and transparent with their customers and treat them fairly and with empathy.   

 There are so many well-established rules and guidelines – including most recently in the Consumer Duty – that are designed specifically to help financial businesses find ways of supporting their customers when the need arises.   

 But despite this, we’re still seeing cases where customer experience has fallen far short of what it should have been.”  

Pointing to examples of cases we investigated, Ms Thomas said people do not always get a chance to engage with businesses before debt collection begins. She called for firms to take a ‘tailored approach’ to understanding why problems have arisen, warning:  

People tell us their experiences of feeling harassed as part of the debt collection process and how their mental health has suffered as a result.”  

We regularly shares our data and insight with the financial sector so together the industry can build a better understanding of emerging issues and take pre-emptive action.  

Speaking at the StepChange conference, Ms Thomas highlighted the steps businesses can take to improve customer support. These include:  

• Training staff to listen, to empathise, and to ask consumers what support they need.   

• Designing policies and practices that focus on finding solutions that help customers.  

• Offering greater forbearance to consumers in financial difficulty and signposting them to support agencies.   

• Putting customers’ needs first and foremost when developing and designing your digital transformation.   

Ms Thomas concluded by saying:  

We want to play our part in building consumer confidence in a thriving, customer focused, competitive financial services sector, supporting growth in the UK economy. 

We’re building a service that can quickly adapt to changing expectations, so that we’re ready for the future, to support every generation from Gen Z to those celebrating their centenary.” 

Notes to editors  

We have more information about our approach to credit and debt collecting.  

The data referenced in this release covers the period 1 April 2024 to 31 June 2024.