PPI complaints hit record level
The Financial Ombudsman Service received 145,546 complaints about PPI during the last three months of 2012. This represented 80% of all new complaints.
The massive caseload was more than double the amount of complaints received in the previous quarter.
The big uptick in PPI cases caused the total number of complaints in the three months to rise to 180,679, which means the ombudsman received more cases in that one quarter than in any single year between 2000 and 2010.
Credit cards were the second-most complained about product, accounting for 3.5% of complaints, while current accounts were the third-most complained about.
Steady rise in complaints
The number of complaints regarding PPI has been steadily rising for some time. Between April and June last year just 32,000 cases were referred to the FOS.
PPI was sold alongside loans and credit cards to cover repayments if the policyholder fell ill or lost their job. But in many cases the insurance was mis-sold and the policy would not have been suitable to claim against.
Complaints are referred to the ombudsman, which is an independent body set up by the government, when the customer is unhappy with how the financial firm has dealt with their original grievance.
Due to the huge number of PPI cases received, customers must fill in a separate PPI questionnaire in addition to the FOS’s standard complaint form.
This article was written for our sister publication Money Observer
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.