Personal Debt disputes on the rise

More people than ever are consulting the Financial Ombudsman Service (FOS) as they try to deal with debt problems caused by poor financial services.

The FOS's annual report shows that they dealt with over 900,000 (925,095) enquiries last year – up over 100,000 on 2008/9. Of the numbers they resolve, consumers receive compensation to ease their financial problems in 50 per cent of the cases.

Nearly half (44 per cent) were related to banking and credit and over 13,000 (13,213) were in relation to personal debt issues – a huge increase of the 2,400 (2,394) such claims the previous year.

One complaint in three was about Payment Protection Insurance, which will soon be no longer available at point of sale to give the consumer more choice and lower the number seeking debt advice because of it.

Kevin Still, director of Atlantic Financial Management, says: "Many people with debt problems have several accounts within one banking group, for example credit card debts, personal loans, an overdraft and possibly their mortgage. Often one bad experience creates another."

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