Don’t get caught out by financial pitfalls

• We are calling on university students to watch out for common financial pitfalls, as it aims to raise awareness and improve understanding of the service it provides.
• Thousands of younger people complain each year about avoidable financial problems.
• We can help students resolve issues with their financial services providers.

We are committed to raising awareness and improve understanding of how the service can help consumers, including students, in times of need.

From managing money with prepaid cards to signing up for credit and insuring new gadgets, students face a wide range of financial decisions that can have lasting consequences if mishandled.

We are a free, impartial service that has the power to settle disputes between consumers and financial services providers.

Rachel Lam, Ombudsman Managing Director said:

University life is exciting but can be daunting, especially for those managing finances on their own for the first time. We want everyone to know their rights, understand risks and feel confident about making good financial decisions.

Our service offers fair, free and final answers to your financial complaints. So, if something has gone wrong and you’re unhappy with how your financial provider has handled your issue, you can bring a complaint to us.” 

Last year (January – December 2025), we received over 10,000 complaints from consumers under 25 years old – with current accounts, hire purchase (motor), car or motorcycle insurance, e-money and credit cards among the most complained about products.

While there are a broad range of useful financial products available to students, we want students to stay safe and be aware of the key financial pitfalls it sees people fall into:

• Open banking and e-money services: Prepaid cards and open banking are popular, but students should know their rights and what to do if things go wrong. If a complaint arises with the provider, it may be possible to bring it to our service.
• Never let others use your bank account: Allowing others to control your bank account could open you up to fraudulent activity. This can lead to fraud markers (such as CIFAS marker) that block access to banking, credit, or even jobs for up to six years.
• Credit cards – handle with care: While safe and beneficial for most people, credit cards can carry high interest rates. Students should consider the amount they’re borrowing and how much they can repay – they should aim to pay the balance in full each month. Consider also that unnecessarily high card limits could lead to issues later down the line.
• Insuring gadgets and tech: Standard home contents policies don’t always cover items like drones, e-scooters, or wearables like fitness watches. Students should check their cover and consider standalone gadget insurance where needed.
• Telematics (black box) car insurance: These policies may help young drivers save money and access insurance, but students should check the terms to understand how the data is collected, how driving behaviour is scored, and what could trigger cancellations or premium increases.

Protect yourself: top tips for students

• Always read the small print before signing up for financial products.
• Ask questions if you’re not sure – and seek help early if you get into difficulty.
• Be wary of offers that sound too good to be true.
• Protect your personal details and never share your account.
• Check insurance policies carefully so you know what’s covered and what’s not.

Useful links

• For more advice on protecting yourself from scams, visit the Report Fraud website. 
• For free and impartial guidance (backed by government) on money matters, visit Money Helper.