British Banks Continue to put Pressure on Customer Finances

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To coincide with recent statistics released by the Financial Ombudsman Service, UK based debt company Debt Free Direct have noticed an increase in customers looking for debt advice.

"We are continuing to see an increase in debt help enquiries from individuals worried about their finances." Derek Oakley, Debt Free Direct

According to recent data released by the Financial Ombudsman Service (FOS), banks are rejecting thousands of requests every month from customers looking for help with their finances. As a result, the FOS has seen an increase in the number of complaints relating to unfair overdraft charges and miss-sold payment protection insurance (PPI) plans, leaving customers unable to afford basic essentials like council tax, utility and food bills. As a result, Debt Free Direct are noticing a large number of requests for debt advice.

The Financial Ombudsman Service, which is an independently run service that deals with complaints from consumers and businesses in the financial industry, revealed that 13,053 cases were brought to its attention during 2009 from consumers looking for more leniency from their banks. Debt management and IVA help company Debt Free Direct expect to see this number of complaints increase in 2010 as thousands of individuals sought debt advice with the company in 2010 so far.

Derek Oakley, Insolvency Director at Debt Free Direct comments:

“We are continuing to see an increase in debt help enquiries from individuals worried about their finances. For many of these people, overdraft charges are adding to their already stretched budgets. We would always recommend that individuals seek professional debt advice if they find themselves struggling to pay their bills each month.

Compared with just 2,800 similar complaints to the FOS in 2008, the 360 per cent increase in complaints may indicate the UK banking organisations are responding poorly to their customers needs during the economic downturn. In particular customers concerns include individuals in debt who are being charged fees on their overdraft facilities or insurance policy holders who have not been paid out on their claims.

Although traditional legal routes for reclaiming money lost through overdraft charges have now ended following a landmark ruling in November 2009, there are still ways in which individuals can claim this money back providing they can prove they are in financial difficulty. With charges of up to £35 every time the overdraft limit is exceeded, such fees could be contributing to furthering levels of personal debt for many customers in the UK.

According to the Ombudsman service, many banks will ignore individual’s pleas of hardship and refuse to suspend overdraft charges, renegotiate overdraft limits or restructure outstanding debts, despite this going against the industry lending code for personal banking. In the case of most complaints put forward to the Obmundsman, the customer will have already been refused a refund by their bank on any outstanding overdraft charges.

Debt Free Direct recommends the best course of action for anyone with financial worries is to seek professional, confidential debt advice. Many individuals may feel reluctant to discuss the details of their financial difficulties, but seeking advice is one of the first steps to becoming debt free.

They state, “Our aim is to suggest an effective debt solution for every individual using our Best Advice Model (BAM). BAM quickly and accurately analyses the financial information for each person and recommends the most appropriate, least drastic solution for them.”

Debt Free Direct, a UK based Debt Management and Insolvency Company receives thousands of inquiries each month for debt advice. The company, which was founded in 1997 specialise in providing impartial debt advice and guidance for individuals in financial hardship.

For free, confidential debt advice visit Debt Free Direct at .


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Paul Culshaw

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