Claims managers fuelling PPI complaints

PPI claim form

Almost two-thirds of the 329,509 complaints received by the Financial Ombudsman Service (FOS) over the past year were about payment protection insurance (PPI).

While the number of PPI complaints reported reduced by half compared to the previous year, a greater proportion of them came from claims management firms. Some 79% of complaints were filed by such companies, compared to 72% in 2014 and just 57% in 2013.

The increase in activity from the claims firms comes despite the FOS telling consumers using a claims manager won't give them a better chance of 'winning' their complaint and is "likely to significantly reduce any compensation they receive".

For example,, a PPI claims firm advertising on Google, charges a 15% (12.5% plus VAT) cut of any compensation awarded as its fee. And its website insists that this is a "low and competitive fee".

However, the FOS added that it recognised some people prefer to pay someone to complain for them and so it works with the companies to dissuade them from referring cases to it unnecessarily.

Current account and payday loan complaints

In the past year, the FOS also said it has seen a sharp spike in complaints about current accounts and payday loans.

Problems with current accounts were up by 78% to 35,344 and were mainly driven by complaints relating to packaged accounts – accounts that come with a range of extras, such as insurance, usually for a monthly fee. These accounted for almost two-thirds of current account complaints, and the number of packaged account complaints was up 278% year-on-year.

The FOS said it upheld 36% of all current account complaints in the 12 months to March 2015, compared to 40% a year earlier.

Meanwhile, complaints about payday loans rose by 46% on the previous year, with the FOS dealing with 1,157 new complaints. FOS data also showed that consumers in the North East were more likely to complain about PPI.

In the FOS' 15-year history, it has answered 15 million consumer enquiries and sorted out 2.8 million disputes between financial companies and customers.

Chief ombudsman, Caroline Wayman, explained: "The world has moved on and changed significantly since I first joined the ombudsman as an adjudicator in 2001. Yet our workload over the last 15 years has been constantly dominated by the past - clearing up the fall-out of the mass claims and mis-selling scandals of the last decade and a half.

"But 15 years of sorting out millions of these problems have given us unparalleled experience, knowledge and understanding of why complaints happen – and how they could be avoided in future. That's why our focus continues to be on complaints prevention and sorting things out pragmatically as soon as problems emerge."

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