Complaints about financial products jumped 70% from a year ago, while building insurance disputes hit a 10-year high, according to the Financial Ombudsman Service.

Consumers raised 74,645 cases about financial products in the first quarter of the financial year, between the start of April and the end of June.

Credit cards drew the most attention in the period, receiving 18,175 complaints.

This was followed by 15,925 motor hire purchase grievances and 8,698 complaints about current accounts.

Financial Ombudsman Service chief executive Abby Thomas says: “It’s concerning that we’re continuing to see large volumes of complaints, particularly considering the cost-of-living crisis.

“It’s vital that businesses are open and transparent with their customers, treating them with fairness and understanding.”

The body points out that professional disputes firms now account for around half of the complaints it received, compared to just 17% in the first three months of last year.

But it adds: “Using a professional representative does not necessarily lead to a more favourable outcome.

“Today’s data demonstrates that, in quarter one of this financial year, only 25% of claims brought by professional representatives were upheld, compared to 40% of those brought directly by consumers to us free.”

The disputes service says that homeowners and businesses brought 2,001 building insurance complaints to it within the first quarter of this financial year – the highest number of complaints within a three-month period.

It says the number of building insurance complaints has been increasing steadily over the past ten years, and in the last financial year, 41% of cases were upheld.

The top three reasons for complaints being brought to us in the last financial quarter are claim decline, at 41%, claim delay, 23%, and claim value, coming in at 8%.

Financial Ombudsman Service ombudsman director in insurance Sean Hamilton points out: “Buildings insurance complaints have been steadily on the rise for some time, but it is concerning to see this significant change in the number of unhappy consumers coming to our service in just a three-month period.

“We encourage the sector to take on board this insight and the reasons for which we are seeing cases, and to improve communications, transparency and timeliness.”

Yesterday, the Financial Conduct Authority said it will investigate how pure protection insurance products are sold following concerns that competition is not working well in the market.  

Around £4bn was paid out in pure protection claims in 2022, with the products mainly sold through independent financial advisers or mortgage brokers.

The City watchdog said it has concerns that the design of commission arrangements may not allow firms to deliver good outcomes to policyholders.