PPI complaints flood in at 6k per week
Complaints about payment protection insurance are still swamping the Financial Ombudsman Service, accounting for 74% of its workload.
The ombudsman received around 6,000 new PPI complaints each week throughout October, November and December 2013 – a time in which 107,267 complaints about financial businesses came in, and 79,578 about PPI specifically.
During the quarter, 48% of those PPI were upheld in the consumer's favour.
While current accounts were the next most complained about product, compared to PPI, the numbers received were smaller but still significant.
There were 3,568 during the three-month period and the Ombudsman found in the consumer's favour in a third of cases.
Similarly, 1,261 complaints were received about packaged accounts and a massive 80% were upheld in the consumer's favour.
And while payday loans often come under heavy criticism, the FOS only received 218 complaints about them in the last quarter of 2013 – although it did uphold 59% of them.
The Ombudsman also received insurance complaints caused by bad weather – which often involve broken boilers, burst pipes and structural damage to roofs, walls and fences.
In one case highlighted, it said it had found in the consumer's favour when the insurer had wrongly rejected a claim for storm damage on the grounds that the damage was caused by wear and tear of the old roof rather than a storm. It even disputed there had been a storm on the night in question – a claim the FOS was able to dispel.
"Many people's dealings with financial services are strained. And consumer trust in financial services is – at best – fragile," said Tony Boorman, chief executive and ombudsman at the FOS.
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.
Short-term cash loans designed to be borrowed mid-way through the month to tide the borrower over until they next get paid, whereupon the loan is settled. Generally used by people with bad credit ratings and/or no access to short-term credit such as an overdraft or credit card. Like logbook loans, this type of borrowing is hugely expensive: the average APR on payday loans is well over 1,000% and in some instances can be considerably more.
A current account that charges a monthly fee in return for a “package” of additional services, such as travel insurance, credit card protection, mobile phone insurance, identity theft insurance, car breakdown cover or a “concierge service” that will book airline and theatre tickets or restaurant tables. However, many consumer experts say the features are overpriced and that more competitive deals exist elsewhere in the market and that very few packaged account holders actually take advantage of the features.
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.