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PPI becomes most complained about product ever
Complaints figures from the Financial Ombudsman Service show payment protection insurance accounted for 60% of its workload in the past year.
The number of complaints made to the Financial Ombudsman Service (FOS) rose sharply to 1.2 million over the past year as consumers continued to claim money back for mis-sold payment protection insurance (PPI).
In the 12 months to 31 March 2012, some 1,268,798 complaints were made, and one in five, 264,375, of those complaints were escalated to disputes. The number of complaints that were escalated has also risen by 28% since last year.
Investment-related complaints fell 4% and banking complaints fell 1%, but insurance complaints, excluding PPI, rose 31%.
Some 64% of customers with complaints received compensation.
FOS chairman Nicholas Montagu said the work of the FOS had been ‘dominated’ by the mis-selling of PPI following a High Court ruling last April that forced the banks to pay out over PPI mis-selling.
‘These complaints – which rose sharply in volume after the judicial review brought by the banks found in our favour in April 2011 – accounted for 60% of our total annual workload. The judicial review resulted in the banks accepting our approach to deciding PPI cases and the Financial Services Authority’s guidance on case handling.
‘At the same time, media coverage made large numbers of consumers aware for the first time that they might have been mis-sold PPI policies. We received over 150,000 of these cases during the year – the highest number we have ever received in a year about a single financial product… We are still receiving PPI complaints at the rate of over 1,000 new cases every day.’
Consumer group Which? said the FOS figures were proof that financial institutions were still not treating customers fairly.
'The record increase in the number of new complaints going to the financial ombudsman shows that too many financial institutions are still failing to treat customers fairly when things go wrong. The fact that over 250,000 people took their problem to the ombudsman this year is further evidence that banks and insurers must transform the way they handle complaints,' said Which? executive director Richard Lloyd.
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by Michelle McGagh on Dec 04, 2013 at 11:58