PPI complaints soar

| September 11, 2012
PPI complaints soar

The Financial Ombudsman Service (FOS) received 1,500 complaints about Payment Protection Insurance (PPI) mis-selling per day, in the first six months of 2012

The number of PPI complaints received by the ombudsman grew by 42 per cent to 85,562 in the first half of the year, despite banks promising to deal with compensation claims promptly.

Businesses are required to deal with complaints within eight weeks, if the issue has not been resolved satisfactorily after this time, customers can take the complaint to the FOS.

In total the FOS has received over 400,000 complaints about PPI, which was sold alongside loans and credit cards to cover repayments if the borrower fell ill or was made redundant.

It has expressed its disappointment that banks are still failing to resolve the complaints themselves, particularly as it is upholding around seven out of 10 cases as genuine.

The ombudsman received 23,703 new complaints about Barclays in the first half of the year, making it the most complained about bank, and 19,522 of these complaints involved PPI.

Lloyds TSB was the second most complained about bank, with 12,235 new complaints made to the FOS, including 9,493 concerning PPI.

PPI complaints have been flooding in since 2011 when High Court ruled that customers could claim a refund if they had been mis-sold PPI.

Mis-selling occurred when customers were sold policies that they were ineligible to claim on, or when unacceptable sales practices were used.

Natalie Ceeney, chief executive of the FOS and chief ombudsman, said: “The volume of PPI complaints doubled in the first half of 2012 and has continued to increase since then, with up to 1,500 new cases arriving each day.

“We’ve also seen an increasing shift towards consumers doing it themselves rather than using a claims manager – with up to half of all new complaints coming directly from consumers without paid-for representation, compared with less than 20 per cent a year ago.”

It is estimated that around 16 million PPI policies were sold after 2005, with many banks offering substantial financial incentives to staff for selling the product.

Tags: ,


Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Comments are closed.