Payment Protection Insurance complaints soar by 58%

Complaints about payment protection insurance (PPI) have increased by 58% compared to last year, the Financial Ombudsman Service (FOS) announced today.

PPI grievances now account for three out of every ten new cases referred to the ombudsman service, the FOS said in its annual report. This follows a three-fold increase in the number of PPI complaints the year before last.

James Daley, Which? Money editor, said: ‘It’s totally unacceptable that some firms continue to dismiss legitimate complaints out of hand. This could be just the tip of the iceberg as many people give up at the first hurdle rather than going to the Ombudsman’.

‘It also reinforces the need for the Financial Services Authority (FSA) to push ahead with plans to force firms to review rejected PPI complaints,’ he added.  

The news follows an announcement by the Competition Commission last week that a ban preventing banks from selling PPI at the point of sale is set to go ahead. This will force banks and other lenders to wait seven days before they try to sell PPI to customers taking out loans.

The FOS report also showed that complaints about banking and credit have risen by 30%, with complaints about consumer credit, including point of sale loans, catalogue shopping and credit broking, more than doubling.

Complaints about unsecured loans and financial hardship have also increased, but complaints about credit cards and mortgages showed signs of levelling off.

Meanwhile, investment complaints stayed at the same level, while motor insurance disputes and pension complaints both fell by 13% and 27% respectively.