The Financial Ombudsman Service (FOS) saw a 40% rise in consumer credit complaints between 2016-17 and 2017-18, figures from the dispute resolution service have revealed.

The FOS’s annual report showed that consumer credit products became the single most complained about product class in the banking and credit category, with 36,349 cases. They constituted 35% of all new banking and credit complaints, up from 26% a year ago.

Hire purchase complaints rose 15% to 5,805 cases, while hiring, leasing and renting complaints – which also include disputes around property – soared 73% to 1,587 cases. Consumer credit was the second most complained about products among those under 25, after bank accounts, and between 25 and 34, after PPI.

A section of the report highlighted car finance agreements as a source of complaints over unexpected charges and repayment difficulties.

“Unfortunately, we’ve continued to hear from people who haven’t got the great deal they were expected,” said ombudsman manager Mark Hollands.

“Despite the low upfront cost of arrangements like PCPs, we do hear from people who are struggling to keep up with their repayments. As in other areas of credit, car finance providers aren’t always responding as positively as they should when they know someone’s in trouble.

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“But we’ve noticed too that some lenders aren’t being thorough enough with the affordability checks they’re carrying out right at the start.

We’ll continue to engage with lenders to help them address customers’ concerns constructively – and more importantly, not sign people up for ‘deals’ they don’t understand and can’t actually afford.”

The Financial Conduct Authority (FCA), which sets the remit of the FOS but does otherwise not interfere with its operations, is currently carrying out a review in the motor finance market.

The FOS came under scrutiny earlier this year after an undercover report by Channel 4’s Dispatches documented instances of complaint mishandling. Following the report, FOS chief executive Caroline Wayman said she would launch an internal review across the organisation.