Payment Protection Insurance complaints up 58%

Payment Protection Insurance complaints up 58%

19 May 2010 / by Rachel Mason

Payment Protection Insurance (PPI) complaints are up 58% on last year, according to the Financial Ombudsman Service (FOS).

In its annual review, the FOS revealed that PPI complaints account for 30 per cent of all new cases – 49,196 complaints in total. This is up from 31,066 on 2009 and from 10,652 in 2008.

"A small proportion of the PPI complaints we receive relate to claims made by consumers under their PPI policies," said the report, "but the vast majority of our workload involves complaints about the sale of PPI policies."

The FOS's report follows a provisional ruling by the Competition Commission (CC) that point-of-sale PPI will be banned – companies would have to wait seven days after the sale of the associated credit products before offering PPI.

The FOS also noted in its report that as volumes of PPI complaints have continued to increase, a particular area of concern has been "the failure on the part of some businesses to engage properly with the individual details of each complaint," but says after having written to businesses and claims-management the situation has improved.

But the consumer watchdog, Which? says that too many PPI complaints are still being wrongly dismissed. "It's totally unacceptable that some firms continue to dismiss legitimate complaints out of hand," said Which? editor James Daley. "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 FSA to push ahead with plans to force firms to review rejected PPI complaints," he said.

The FSA has proposed to reform the PPI industry to ensure customers are treated consistently and fairly, either when buying new PPI policies or making a complaint about an existing one. It recently invited feedback from consumers and the industry, and was "disappointed" by the industry's critical response, but says it remains "100 per cent committed to bringing about genuine, lasting change in the PPI market".

So far, the FSA has halted single premium PPI sales, taken enforcement action against 23 firms, issued two ‘Dear CEO’ letters, undertaken three thematic reviews, conducted numerous mystery shops, and visited over 200 PPI providers, but hopes force firms to reassess any rejected PPI complaints may not have received fair investigation or consideration.

© Fair Investment Company Ltd