Payday loan complaints to Financial Ombudsman triple

The Ombudsman said it received 4,186 complaints about payday loans in the first half of the year, up from 1,213 in the previous six months.

Some 53 per cent of payday complaints were upheld, although the payday industry insisted that the figure represented a falling proportion of upheld complaints.

The number of complaints was vastly overshadowed by those still being made about payment protection insurance (PPI).

PPI enquiries totalled 91,381 in the six months to June, accounting for 54 per cent of all new cases considered by the ombudsman during the period.

The Consumer Finance Association, which represents some of the major payday providers, claimed most customers felt they were treated better by payday operators than by other types of lenders.

Chief executive, Russell Hamblin-Boone, said: “We are obviously disappointed with the number of complaints, but this must be viewed in perspective. Of around a million loans funded there were about 2,000 upheld complaints.

“The true picture is represented by a recent customer satisfaction survey by Smart Money People, which showed that 95 per cent of short-term credit customers felt they were treated fairly against an average of 88 per cent of all credit customers.”