skip tocontent

consumer-credit customers covered by ombudsman for first time

5 April 2007

From this Easter-weekend, customers of up to 80,000 UK businesses will be covered by the Financial Ombudsman Service for the first time - when the ombudsman's remit is officially extended under Consumer Credit legislation.

All businesses trading with a standard consumer-credit licence issued by the Office of Fair Trading will automatically come under the ombudsman from Good Friday (6 April). This means their customers will have access to the ombudsman's free complaints-handling service, in the event of a dispute relating to consumer credit such as loans, payment plans, pawnbroking and hire purchase.

The 80,000 firms set to come under the ombudsman's remit mostly offer consumer-credit services as an add-on to their normal business. As well as thousands of shops and retailers that provide finance facilities - from furniture stores and hifi specialists to kitchen-design showrooms and jewellers - businesses with a consumer credit licence also include sports clubs, piano-hire firms, builders, dentists and car-dealers.

For the ombudsman to be able to help, complaints about consumer credit must relate to an event after 6 April 2007 - and consumers need to have raised the problem first with the business concerned. From this weekend, all businesses with a standard consumer-credit licence must by law have formal complaints-handling procedures in place - to try to resolve any problem before the ombudsman gets involved.

Banks and building societies providing loans and mortgages - over two-thirds of the UK consumer-credit market - have been covered by the ombudsman for twenty years. This means the ombudsman service already has extensive practical experience of dealing with consumer credit disputes.

A full communications programme - including a nationwide series of roadshows and events, a special section of the ombudsman website on consumer credit, and information packs mailed to all businesses concerned - has helped the consumer-credit sector and the ombudsman work together in preparation for the new complaints-handling arrangements coming into force.

media enquiries

  • Emma Parker – phone 020 7964 0966
  • David Cresswell – phone 020 7964 0134
  • out of hours – phone 0771 8658 306