400,000 unresolved PPI cases still with the watchdog
The Financial Ombudsman Service (FOS) has a "stock" over 400,000 unresolved payment protection insurance complaints, which it says will take some time to resolve.
Of these unresolved cases, around 60,000 will be more than 18 months old by the end of this financial year.
The ombudsman said that PPI cases take longer to resolve than other disputes because it is often difficult to reach agreement between the two parties – the claimant and the financial services company.
However, the amount of cases being resolved within six months has fallen from last year. Just under 70% of PPI complaints were resolved within six months during the 2013/14 financial year to date, down from 73% in the 2012/2013 financial year.
The trend is the same with cases being resolved within three months, with 40% successfully dealt with in compared to 43% 12 months previous.
The FOS also reported the amount of cases resolved within 12 months has increased as well, with 91% of cases within a year sorted out, compared to 89% in 2012/13.
Overall, in the 2013/14 year to date, the number of resolved PPI complaints has risen compared to the 2012/13 financial year when 101,000 cases were resolved. By the end of the 2013/14 financial year, the ombudsman expects the figure to be around 310,00.
Tony Boorman, interim chief executive and chief ombudsman, said: "For the last few years our focus has been on building up our capacity to meet the unprecedented challenges of PPI.
"While we expect the volumes of PPI complaints to decline, the numbers are still likely to be substantial. Our plans take this into account – but we will still be relying heavily on the patience of consumers and the cooperation of businesses, before we will be able to draw a line under the PPI saga."
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.