Financial Ombudsman Inundated by PPI Complaints
For a few years now financial irregularities have been at the forefront of claims management activities – especially the mis-selling of loans and credit cards. The wave of enthusiasm surrounding these types of claims quickly became as popular reclaiming bank charges. However, since the banks won the battle over bank charges, financial irregularities has also taken a back seat. In place of that, PPI (short for Payment Protection Insurance), has gripped the nation since the FSA began dishing out fines to companies guilty of mis-selling PPI on loans, credit cards and mortgages. There are thought to be millions of victims of this scandal which has put huge pressure on financial institutions obliged to pay back these PPI premiums plus interest.
The investigation, which uncovered many flaws in these policies, revealed that many people that were being sold this cover in the past were not even eligible to make a claim. Others were being told that they had to take out the cover in order to get finance, and some were having this costly cover added onto their finance without even knowing about it.
Over the past year the FSA’s ruling on the selling of PPI has had a significant impact on the amount of claims being brought to the attention of the Financial Ombudsman Service (FOS). Despite the anouncement that PPI policies can no longer be sold alongside financial poducts such as loans and credit cards. Clampdown figures show that PPI complaints still appear to be dominating the financial complaints sector. The Financial Services Authority has already taken action against more than twenty firms for the mis-selling of this cover in addition to initiating the clampdown.
According to figures around 45 percent of the workload of the UK’s Financial Ombudsman Service was made up of PPI related complaints in the three months leading to October. The second most common complaint was relating to current accounts, which made up 11 percent of complaints, and the third most common was credit card complaints, which made up 10 percent of the FOS’ workload.
Complaints about mortgages made up only 4 percent of the ombudsman’s complaints workload, and both motor insurance and savings accounts came in at 3 percent. With complaints and claims relating to PPI having soared since regulators clamped down on this cover it is likely that the workload of the FOS will be dominated by Payment Protection Insurance complaints for some time to come.
