Bounce Back Loan contributes to Financial Ombudsman complaints rising 20%

Posting its figures for the Q2, between July and September, the Financial Ombudsman Service revealed that complaint volumes were up 20% on the same period last year, following the introduction of business loans such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan.

The Financial Ombudsman said that it had seen a ‘significant’ increase in complaints about travel insurance, business protection insurance and complaints from SMEs relating to the government’s business interruption and bounce back loan schemes.

The latest figures show that the service had received more than 68,700 complaints during the three month period, which it said was up 19% on the previous quarter, and around 20% higher than Q2 2019.

The Financial Ombudsman added that consumer enquiries were up 10% on the previous quarter, at more than 119,200, while referrals were up 17%, to over 9,200. The service added that PPI claims lost their top spot as the most complained-about financial product, and was replaced by complaints about guarantor loans, which had a notably high uphold rate of 88%.

Similarly, credit card-related complaints increased by 26% quarter-on-quarter, and up by 66% year-on-year for the second quarter.

With the introduction of new schemes such as the bounce back loan, the Financial Ombudsman urged businesses to ‘preserve humanness and compassion’, and to ensure customers get the right care during these difficult times. It added that customer support staff, along with technology, should work together to provide a faster and more empathetic customer experience.

Speaking on the data, Mamta Rodrigues, finance expert and Divisional President at Teleperformance comments:

Banks now have an opportunity to support their customers by creating solutions for the troubled economic times. Better known as workout specialists or remediation managers, these individuals can work with customers to find better payment solutions and alternatives which drive results for the bank whilst also appeasing the immediate strains from credit card, mortgage and loan bills.”

“New payment solutions are “worked out” as the customer comes first and providing an extended payment scheme results in higher repayment overall. This has the benefit of reducing collection costs and increasing much needed revenues while increasing customer loyalty.”

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.